Lords Sitting of 21 December 1965

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford

CIVIL SERVANTS AND B.B.C. FILM
2.35 p.m.
LORD ST. HELENS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government for what purpose the television programme, The War Game, was seen by a group of senior civil servants.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, they were invited by the B.B.C. to see the film. Having done so, they reported to Ministers who decided that the question of showing the film was entirely one for the B.B.C. The Corporation have themselves made it clear that the decision not to broadcast the film was their own.
LORD ST. HELENS: My Lords, may I thank the Minister for his reply, and for finally scotching any rumour there may have been about this particular occurrence?
LORD STONHAM: My Lords, I am most grateful to the noble Lord.
LORD ERROLL OF HALE: My Lords, could the noble Lord, Lord Stonham, give the House an assurance that it is not going to become the practice that civil servants will be invited to spend their time seeing films, and will then give their advice to the B.B.C. on controversial matters?
LORD STONHAM: My Lords, it is impossible to give an assurance of that kind. It is entirely a matter for the B.B.C. to invite whom they wish to see
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a film. The Government have not interfered in this matter in any way whatsoever.

GOVERNMENT GRANTS FOR YOUTH SERVICE
2.37 p.m.
LORD ROBERTSON OF OAKRIDGE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether it is now their policy, in making grants for the benefit of youth service, to curtail their grants to one-sex organisations such as boys' clubs, in order to divert the money so saved to mixed organisations.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TECHNOLOGY (LORD SNOW): My Lords, grants were offered during the last three years to national voluntary youth organisations towards their headquarters' administration and training expenses. A list of these grants was given in the OFFICIAL REPORT of another place on October 28. There is no bias against single-sex organisations, and such is not the policy of my right honourable friend the Secretary of State for Education and Science. He acknowledges the valuable services they provide, especially for the younger age groups; but he is also aware of the need for new thinking, and possibly new kinds of provision, in the upper age range.
LORD ROBERTSON OF OAKRIDGE: My Lords, I should like to express my thanks to the Minister for his courteous reply—indeed his most comforting reply. On the other hand, I should like to ask whether he is aware that the Sunday Times of November 7 published a report containing alleged quotations from the Minister responsible for sport, which gave an exactly contrary impression and has caused a lot of discouragement among those who are working in and for boys' clubs. Perhaps I might ask the Minister, if he is aware of that report, whether he considers that some statement ought to be issued along the lines of the reply he has given in order to make the matter clear generally?
LORD SNOW: My Lords, I was not aware of the report which the noble Lord has just quoted. The policy I stated is, of course, the policy of my right honourable friend the Secretary of State for Education and Science and all his Ministers. But I will certainly bring the noble Lord's remarks to the attention of my right honourable friend.

BRITISH CONTROL OF RESERVE BANK OF RHODESIA
2.40 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their action in taking over control of the Reserve Bank of Rhodesia is to be taken as a precedent for the future and as in keeping with our role as bankers for the sterling area.]
LORD SHEPHERD: My Lords, the present situation is unique. The suspension of the former Board of the Reserve Bank and the appointment of a new Board was done under the quite exceptional powers conferred upon Her Majesty in Council under the Southern Rhodesia Act. It cannot be taken as a precedent.
VISCOUNT MASSEREENE AND FERRARD: My Lords, while thanking the noble Lord for his Answer, I would ask whether he is aware that there are many people in this country who, while agreeing that the Rhodesian Government has committed an illegal act, also remember cases in which other countries whose balances we hold have committed illegal acts—for instance, the invasion of Goa by India. Is the noble Lord aware that people wonder why the British Government did not on that occasion seize the balances held in this country by the Bank of England on behalf of India?
LORD SHEPHERD: My Lords, there is a great deal of misunderstanding in many parts of the country, and possibly also in your Lordships' House. In regard to the incident to which the noble Lord referred, he will take into account that India was an independent country. The present circumstance is of an issue
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between Her Majesty's Government, Parliament and the country, with a Colony—a quite different proposition.
VISCOUNT MASSEREENE AND FERRARD: My Lords, is the noble Lord aware that, while agreeing technically that Rhodesia is a Colony, she has been self-governing for forty years, and responsible for her own home affairs and her defence, and that in the case of Rhodesia many people regard the term Colony as a misnomer?
LORD SHEPHERD: My Lords, I would imagine that that was a statement. The noble Viscount will have an opportunity of expressing his views, if he so wishes, in the debate later this afternoon. But I hope that he will bear very much in mind that Parliament is responsible for the Colony of Rhodesia, and whatever action we are taking is taken to bring Rhodesia back within the Commonwealth.

TANZANIA AND TERRORIST GROUPS
2.42 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, in view of the statement made by the Secretary for External Affairs for the Mozambique Liberation Front that terrorist groups are to be trained in military camps in Tanzania for action in Rhodesia, what representations, if any, they intend to make to President Nyerere not to grant training facilities for these terrorists, in order to avoid bloodshed in Central Africa.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON): My Lords, I am not aware of the statement to which the noble Viscount refers. Her Majesty's Government do not believe that terrorism in any form is the right way of solving the problems in Central Africa or anywhere else. As the noble Viscount will no doubt be aware, the Government of Tanzania are no longer in diplomatic relations with the British Government.
VISCOUNT MASSEREENE AND FERRARD: My Lords, while thanking the noble Lord for his Answer, may I ask him whether he is aware that the statement referred to in my Question was that of Mr. Santos Mancellini, and was quite widely publicised in the Press? Is the noble Lord further aware that, though Tanzania has broken off diplomatic relations with this country, she is still in the Commonwealth and is to a great extent subsidised by the British taxpayer? Might I also ask the noble Lord whether he remembers the statement of the Prime Minister, in an interview to the Daily Mirror earlier this month, in which he stated that he did not underrate the horrors of externally inspired subversion in Rhodesia?
LORD WALSTON: My Lords, I am aware of all those things which the noble Viscount has stated. But that still does not, in my view, justify Her Majesty's Government in any way interfering and making representations to the Government of an independent country. Her Majesty's Government's views on terrorism are well known and are as I have stated. They are clearly well known to all the other countries with which we are in contact and to those with which we have no diplomatic relations.

RHODESIA: GOVERNMENT'S ATTITUDE ON BLOCKADE
2.44 p.m.
VISCOUNT DILHORNE: My Lords, I beg leave to ask the following Question, of which I have given notice:
To ask Her Majesty's Government if they will undertake not to impose a blockade or the use of force in any other way in the implementation of their policy in relation to Southern Rhodesia, without first securing the approval of Parliament.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I can certainly assure the noble and learned Viscount that, as my right honourable friend the Prime Minister has made clear on a number of occasions, it is not the intention of Her Majesty's Government to embark upon unilateral military action, including the institution of a blockade against the illegal régime in Rhodesia. I can further assure the noble and learned
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Viscount that, were there to be grave developments in the United Nations during the coming Recess, Her Majesty's Government would seriously consider recalling Parliament. The Government will, in any case, be at the disposal of the Leaders of the Opposition Parties in both Houses for consultations on these matters at any time during the Recess.
VISCOUNT DILHORNE: My Lords, I am grateful to the noble Earl for the Answer he has given, and if it means what I think it means I would regard it as satisfactory. There is a reference in the Answer to "grave developments in the United Nations". Am I correct in thinking—I think it is to be inferred from this Answer— that any proposal to impose a blockade would be regarded as a grave development?
THE EARL OF LONGFORD: My Lords, the noble and learned Viscount will realise that I am now offering my personal interpretation of a Government Statement, and I must speak subject to that qualification I am not sure that "any proposal" (to use that precise term) in the United Nations would be a grave development. After all, it might be a development that was rejected. But any imposition of a blockade would, in my opinion, appear to be a grave development.
VISCOUNT DILHORNE: My Lords, I am sorry to press this matter a little more. But the noble Earl will appreciate that, before this country voted for, or was committed to, any such proposal at the United Nations, it would, as I think, be a widely felt desire that this House should have an opportunity of debating the matter before Her Majesty's Government were committed.
THE EARL OF LONGFORD: My Lords, I am sure that very great attention will be paid to what the noble and learned Viscount has said. He will appreciate that I cannot add to what is in the Statement, but since he interpreted it in the way favourable to his point of view, let us hope that his interpretation is correct.
THE MARQUESS OF SALISBURY: My Lords, I noted one word in the noble Earl's reply. As I understood it—I am asking a question, only this is preliminary to the question—he said that we would

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not use force or a blockade unilaterally, unless Parliament was consulted first. What does that word "unilaterally" mean? Does it mean that, if we did it in combination with other nations, the Government would not be bound to recall Parliament before action was taken?
THE EARL OF LONGFORD: My Lords, I am afraid that the noble Marquess did not quite hear my statement, which I may have read too fast. I did not give an absolute pledge that Parliament would be recalled in any circumstances. But I did give a pledge that Her Majesty's Government, in certain circumstances, would seriously consider recalling Parliament and would, in any case, be accessible for discussions with the Opposition Leaders. I should not like there to be some misunderstanding on that point. If I understand the noble Marquess correctly, he would regard, as I would, any serious plan of using force on behalf of the United Nations as a grave development, which would be clearly covered by what I have read out this afternoon.
LORD COLERAINE: My Lords, do I understand the noble Earl aright in his answer? My noble friend, as I understood him, asked for a categorical pledge that no force would be used, by blockade or otherwise, without getting Parliamentary approval. Do I understand the noble Earl aright in saying that the answer to that is, No: he can give no such pledge; he can only declare the intention. Is that right? He has given no pledge?
THE EARL OF LONGFORD: My Lords, I have gone a long way to meet the noble and learned Viscount, and I think that when the noble Lord, Lord Coleraine, reads what I have said he will feel that I have gone further than he may have expected.
LORD COLERAINE: My Lords, why cannot the noble Earl give a positive undertaking that these steps will not be taken without Parliamentary approval?
THE EARL OF LONGFORD: My Lords, I am afraid that, as the noble Lord realises, we are responsible, or may be responsible, for very rapid action. But I think that taken together the two pledges I have given, of complete accessibility at all times to the Leaders of the Opposition, and a readiness to consider a
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recall if there were grave developments, would satisfy the vast majority of Members of the House.
VISCOUNT DILHORNE: My Lords, is there not a technicality here which may arise from the way in which I framed the Question—namely, that it does not rest with the Government to recall Parliament; that has to be done by other machinery? I took the sentence in the last part of the Answer to be referring to that technical situation, where it does not in fact lie in the Government to decide on the recall of Parliament; other steps have to be taken. Am I not correct in thinking that that is the reason for the somewhat unusual language, perhaps, of the last part of the Answer? And am I not correct in taking it that this does in fact mean that, before there was any proposal to use force, whether by the United Nations or by ourselves, which looked like being implemented, steps would be taken through the ordinary machinery to enable Parliament to be recalled if it was thought right by the Leaders of both the Opposition Parties?
THE EARL OF LONGFORD: My Lords, I think the noble Viscount's contribution has been entirely helpful. He has called attention to the technical point that the decision must come from the Speaker in the House of Commons and the Lord Chancellor here. In the light of that, and when this Statement is read, cannot believe that, however much some noble Lords may be critical of the Government, they are in the event likely to be critical of us in this particular respect.
LORD CONESFORD: My Lords, in the event of a blockade being proposed from any quarter, can we take it that Her Majesty's Government will pay some regard to the requirements of International Law?
THE EARL OF LONGFORD: My Lords, I think that that can be taken for granted.
LORD REA: My Lords, does this matter not divide itself into three stages: first, the proposal from any quarter that action should be taken; secondly, the intention of Her Majesty's Government to follow that proposal; and, thirdly, the implementation itself? Could the noble

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Earl say whether Parliament will be consulted on the second stage, as it presumably will not be consulted on the first stage, since any country may suggest action which will not be implemented?
THE EARL OF LONGFORD: My Lords, I think it is rather difficult, if I may say so, to follow up the steps in that analytical way; but, of course, the noble Lord has complete access to me as Leader of this House at any time. I can only repeat that, while there may be many differences in this House on certain aspects of Rhodesian policy, I honestly do not believe that this is a matter on which any difference will, in the event, arise.

LIGHTNING AIRCRAFT FOR SAUDI ARABIA
2.52 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, at a suitable moment after 3.30 p.m. I shall be making a Statement on Lightnings for Saudi Arabia.

COVENT GARDEN MARKET BILL
Read 2a, and committed to a Select Committee.

SOUTHERN RHODESIA (BANK ASSETS) ORDER 1965
2.55 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (LORD BESWICK): My Lords, I beg to move that the first Order standing in my name be approved; and, if it is to the convenience of your Lordships' House, I would speak also to the second Order standing in my name, and suggest that they be discussed together.
The effect of the Reserve Bank of Rhodesia Order is to suspend the governor and other members of the board of directors of the Reserve Bank of Rhodesia; to provide for the appointment of a board by the Secretary of State; and to provide that the Secretary of State may give directions to the board relating to the policy of the Bank for the
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conduct of its business. The Order transfers control of the Reserve Bank from the previous board to a new board appointed by the United Kingdom Government. It does not—I repeat, does not —transfer to the United Kingdom Government the assets of the Bank. The new board at present will operate in London, but the Order permits it to function in Rhodesia or elsewhere.
It is the intention that the internal affairs of the Bank should continue to be conducted from Salisbury, as now. Although inevitably the internal affairs of the Bank in Salisbury will be affected to some extent by this new arrangement, the chief cashier and other officers of the Bank continue in office in Salisbury and will be responsible for day-to-day operations in Rhodesia. As the House will know, a new board has been appointed, under the chairmanship of Sir Sidney Caine, and composed of men of outstanding experience and unchallengable integrity.
The first objective of the Bank under this new dispensation will be to ensure that the assets of the Reserve Bank held abroad are safeguarded in the interests of the people of Rhodesia as a whole, and to help achieve Her Majesty's Government's aim to bring about a return to constitutional government in Rhodesia. I must emphasise that Her Majesty's Government have not confiscated these assets; nor do they intend to do so. References by Mr. Smith and others to "confiscation" are totally unfounded. The assets remain, as they have always been, the property of the Bank and its customers. While under the control of the new board, the accounts of the Reserve Bank will be administered in a way proper to the administration of a Central Bank, subject to any directions which the Government may give. The new board has already been recognised by the Bank of England and by the Central Banks of certain other countries. No Central Bank has refused recognition.
In his speech commenting on this Order concerning the Reserve Bank of Rhodesia, Mr. Smith complained that he had been let down by the Bank of England and that the whole of the international financing mechanism had been brought into disrepute. This complaint is entirely without justification. In recognising the new board, the Bank of

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England has done no more than recognise the law of the land, and no responsible banking institution could have done otherwise.
The connection between the Reserve Bank Order and the Southern Rhodesia (Bank Assets) Order is manifest. The Exchange Control powers which were introduced on November 11 brought all Rhodesian sterling accounts under Treasury control, and the Treasury was enabled to obtain information about transference in or out of those accounts. These measures—the measures relating to the exchange control—did not, however, enable the Treasury to obtain information about net balances held by the banks in the United Kingdom on behalf of Rhodesian banks, and this first Order will enable complete information to be obtained. Although one purpose of the Order is to enable the Treasury to obtain information about the assets of the Reserve Bank of Rhodesia, it has been deliberately drafted in such a way as to cover the assets held in the United Kingdom on behalf of any Rhodesia bank. The Order safeguards the legal position of banks which, at the request of the Treasury, supply the Treasury with information about these assets, for otherwise the banks might be liable for damages. Any information received by the Treasury under the Order will be treated with the strictest secrecy and will be used to the minimum possible extent.
The Order does not apply to assets held in United Kingdom offices of banks on behalf of any Rhodesian resident other than banks; for example, it does not apply to the assets of Rhodesian companies or individuals. It does apply to all United Kingdom offices of banks, whether they be United Kingdom banks or otherwise.
In the belief that your Lordships are more concerned with the general effects and purposes of these Orders, I have not dealt with their technical details. Of course, if there are questions on detail which any noble Lord would wish to put, then those questions will be answered, and my noble friend Lord Shepherd will be glad to deal with them in winding up this debate. However, I do urge those noble Lords who want to probe the details and consequences of
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these Orders to make it clear that they are concerned primarily about their effectiveness to achieve an objective which we all have in common—namely, to create conditions in Rhodesia under which a return to constitutional government becomes inevitable.
That we all regret the necessity for these Orders cannot be disguised, but the necessity arises wholly and solely because of the selfish and intolerable behaviour of Mr. Smith and his supporters in breaking off negotiations and assuming illegal power. The sooner this power is given up, the more hope can we have for averting a threatened catastrophe. It is in the belief that these Orders will play their part in bringing about constitutional government in Rhodesia that I ask the House to support these two Motions. My Lords, I beg to move,
Moved, That the Southern Rhodesia (Bank Assets) Order 1965, be approved. —(Lord Beswick.)
3.0 p.m.
VISCOUNT DILHORNE: My Lords, I am sure it will be for the convenience of the House that we should consider these two Orders together. I do not think that this is an occasion for any kind of general debate, or indeed discussion, of the conduct of Mr. Smith and his supporters. Their conduct should not, I think, affect our consideration of these important measures on which we have the advantage of having reports from the Special Orders Committee. In relation to the first Order, the Reserve Bank of Rhodesia Order, that Committee have reported that "the Order raises an important question of policy and principle—namely, whether it is necessary or expedient for the Secretary of State to gain control of the Reserve Bank of Rhodesia"; and they say that in their opinion the Order cannot be passed without special attention. I am sure that the Special Orders Committee were right—
THE LORD CHANCELLOR (LORD GARDINER): My Lords, will the noble and learned Viscount allow me to intervene to point out that the first Order is the Bank Assets Order. That is the one which is technically before the House at the present time.
VISCOUNT DILHORNE: My Lords, I am grateful to the noble and learned Lord the Lord Chancellor. I did, in fact, mention that both were being discussed together and I mentioned the Order to which I was referring, the Reserve Bank of Rhodesia Order.
As I was saying, I am sure that the Special Orders Committee were right and that we should give this Order very close attention, because this Order, I think, covers an important point. Not only has the board of directors been replaced by a board consisting of very eminent gentlemen whom the noble Lord, Lord Beswick, described as of outstanding ability and unchallengeable integrity; but, also, the Secretary of State is given very wide power to give them directions as to what they may or may not do in the conduct of the Bank. The result is that the British Government have now taken over control of the Bank. The assets held by the Bank for its customers have not been confiscated; and I agree with the noble Lord that it is quite ridiculous for anyone to say that they have. But the Secretary of State now has power to direct the board not to give effect to the instructions of its customers even though giving effect to them does not involve any breach of the law. I do not myself know whether cheques are drawn on this Bank; but, supposing they were, it clearly would be within the power of the Secretary of State to direct the Bank not to honour a particular customer's cheque even though it held assets with which to meet it.
This is a very far-reaching power. The Order contains no provision for making known to Parliament what directions the Secretary of State gives, and Parliament has no power to control the Secretary of State's exercise of the power to give directions. If there were any danger of the former board allowing Mr. Smith and his colleagues to make use of the funds held by the Bank for the Government of Southern Rhodesia, then clearly it is right that that board should have been suspended from office. But was there any such danger? Mr. Smith and his colleagues are no longer Ministers. They have now no lawful claim to constitute the Government of Southern Rhodesia. In these circumstances, I should be surprised to hear that any bank was prepared to let them operate accounts
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in the name of the Government of that country. I am glad that we have Lord Beswick's assurance that the noble Lord, Lord Shepherd, will be glad to answer all questions raised in this debate.
So I put the question: Was there any real risk that this Bank, with its original board, would give effect to instructions given by Mr. Smith or his ex-Ministers in relation to assets held for the Government of Southern Rhodesia? I think we ought to be told about that. Was the original board asked to give an undertaking not to allow Mr. Smith and his colleagues to operate these acounts, and did they refuse to give one? Again, I think the House should be told, because it seems to me that only if they were asked to give, and refused to give, such an undertaking, and only if there was a real risk of their allowing the funds held by them for the Southern Rhodesian Government to be used by the illegal régime, can it be argued that this part of the Order is justified. So, when the noble Lord, Lord Shepherd, comes to reply, I hope he will deal fully with this. I am not saying that justification for this Order does not exist; but that we ought to know what it is. For the justification of this part of the Order must, it seems to me, depend on the very real risk that the illegal regime (who are no longer Ministers of any lawful Government) would have been able to exercise control over assets held by the Bank in the name of the Government. That is the first matter that I want to ask the noble Lord about.
But I would ask him this further question. Why is it necessary for the Secretary of State to be given absolute, unlimited and unfettered power to give directions to the new board consisting of these men of outstanding ability and unchallenged integrity'? Can they not be relied upon to see that the funds held by the Rhodesian Government are not made use of by the illegal regime? I should have thought that the British Government could have relied upon them completely. Therefore I find it difficult to understand why it was thought necessary to give the Secretary of State power to give any directions he thinks fit as to the conduct of the Bank's business. The noble Lord, in introducing theseMotions—and I am sure that the House was grateful for his explanation of them—did not

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really put forward any reasons for giving the Secretary of State such powers. Has the Secretary of State given any directions? If so, what are they? I think we should be told. I think we should also be told of any future exercise of this power.
My Lords, the other Order is the Southern Rhodesia (Bank Assets) Order; and that, in the opinion of the Special Orders Committee, also raises:
"an important question of policy and principle, namely, whether it is necessary or exdicnt to require banks"—
in this country—
"to disclose to the Treasury confidential information about their customers:"
The noble Lord said, rightly, that the disclosure is limited to the disclosure of the assets held by any bank in this country on behalf of any Southern Rhodesian Office of any bank. The only reason given by the Chief Secretary in moving this Motion in another place was (and I quote) that:
"This information, too, may he relevant to the formulation of our policy."—[OFFICIAL REPORT, Commons, Vol. 722, No. 26, col. 1154; 14/12/65.]
That was all he said about the reason why this information was wanted and the noble Lord, Lord Beswick, said that the information, when obtained, would be treated with the strictest secrecy and would be used to the least possible extent.
My Lords, how is this information to be used? I hope that the noble Lord, Lord Shepherd, will be able to tell us a little more than that in justification of this Order, which clearly breaches the confidentiality which exists between customer and bank. It may be very nice to know what assets are held in this country on behalf of any Southern Rhodesian bank, but what use is it intended to make of this knowledge? Is it thought that the steps already taken to stop payments being made to Rhodesia are inadequate? Is it thought that the funds held here on behalf of any bank in Rhodesia are likely to be applied to the use of the illegal régime? If so, mere knowledge of the assets will not suffice. Is it intended by another Order to give the Secretary of State power to direct how such assets ought to be used? My Lords, I think we should ask for answers to all these questions, because upon those answers depends the justification for these Orders.
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I want to turn now to what I feel is a very important question. I am sorry to ask so many questions, but I think they require to be answered, and I hope that the noble Lord will be able to deal with them fully and satisfactorily. By the Reserve Bank Order, as I have said, the British Government now have complete control over the assets held by the Bank. If he wished, clearly the Secretary of State could direct that those assets should be applied in the payment of interest on the Rhodesian public debt. I am sure that the noble Lord will not dispute that the Secretary of State could do this, and that, if he did, no one could say that his action was either illegal or ultra vires.
If I understand the position correctly, Mr. Smith and the other ex-Ministers have no power to direct the Reserve Bank, or anyone else, to pay such interest. Power to do so resides in the Government of Southern Rhodesia, and paragraph 42 of the 1961 Constitution provides, inter alia, that the executive authority of Southern Rhodesia is vested in Her Majesty and may he exercised on Her Majesty's behalf by the Governor. Therefore, it is possible to direct the payment of interest under the Southern Rhodesia Constitution Order 1965, made under the Southern Rhodesia Act 1965. The executive authority of Southern Rhodesia may be exercised on Her Majesty's behalf by the Secretary of State.
My Lords, I have dealt with this matter in some detail for the Chief Secretary to the Treasury, in another place was, I am sorry to say, singularly evasive with regard to it. If the position is as I think it is, that the Secretary of State can direct the payment of interest on the Rhodesian public debt out of the assets held by the Reserve Bank, why has that not been done?
LORD BESWICK: My Lords, may I deal with this point, since the noble and learned Viscount is putting emphasis on its importance?—and of course it is important. This Order has no effect, so far as the transference of any power is concerned, save from one board to another. Of itself, the board has no power and cannot decide to pay out interest. Nor does this Order give any power to the Secretary of State to direct that the board shall pay out any interest. Therefore,

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the argument of the noble and learned Viscount on this point is going outside the actual scope of the Order which we are discussing.
VISCOUNT DILHORNE: My Lords, I do not think that is so. Certainly, in another place it was not considered so outside, and I should not think that it is outside the argument in your Lordships' place.
LORD BESWICK: It is outside the Order.
VISCOUNT DILHORNE: My Lords, I do not know whether that is so, because one has to consider this Order. In a sense the noble Lord is right, but I did not say that the power would be exercised by the Secretary of State under this Order. I pointed out that under this Order there is no limit to the directions which the Secretary of State can give, and that if he were to give directions, under this Order, that the interest shall be paid, no one could say that he was acting illegally or ultra vires. That is to say—and perhaps the noble Lord will be good enough to look at the Order—there is no limit on the power of the Secretary of State to give directions.
I was pointing out, when the noble Lord interrupted me (I am grateful for his interruption), that under the Constitution Order passed and approved by this House, and by Parliament under the Southern Rhodesia Act 1965, there is express and clear powers for the Secretary of State to do things as part of the Government of Rhodesia, and that he could, under that same power, give directions for the payment of interest. I think that is clearly so, and I shall be very surprised to find that the noble Lord, Lord Shepherd, contradicts it.
I am asking—and I think it is relevant —if power exists, as in my view it clearly does, to authorise the Reserve Bank to pay out interest out of the assets held by the Government of Rhodesia on Rhodesian public debt, why this has not been done. Surely it is unprecedented that there should be default in the payment of interest on Colonial stock, and if enough assets are there, why have the British Government not directed that the interest should be paid? Perhaps, in view of the interest taken by the noble Earl the Leader of the House in these matters, I
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should make it clear that I have no interest of any kind to declare. I hold no such stock.
My Lords, I can see that there are good reasons for withholding the payment of such interest to persons in Southern Rhodesia, but it is quite a different thing to withhold the payment of interest to people outside that country. The noble Lord, Lord Beswick, said that when considering these Orders we should be concerned primarily with their effectiveness in bringing about a return to constitutional government. I cannot feel that the withholding of the payment of interest to people outside Rhodesia on Rhodesian public debt can possibly have any effect on events within Rhodesia. If, as I think is the case, it is within the power of the British Government, under the Constitution Order and under the Reserve Bank Order, to make provision for the payment of interest out of assets held by the Bank for the Government of Rhodesia, I hope we shall be told why that has not been done.
My Lords, I should perhaps make clear that we do not intend to vote against these Orders, but I have asked a number of questions which I hope will be answered to my satisfaction, and will not be brushed aside in any cavalier fashion. In this House—and not only in this House—the Government have, I fear, on some occasions shown a somewhat unfortunate tendency not to answer questions very specifically. If these questions are not answered to-day (and I would point out that much the same questions were asked in another place, and were not answered there) one can only conclude—I trust that the country will conclude—that the Government are not able to justify the action they have taken in withholding the payment of interest.
3.20 p.m.
LORD BYERS: My Lords, once again, in deference to the request of the noble Earl the Leader of the House, I must say that I have business interests in Rhodesia. I want to say at the outset that, in my view not only was the Government's action in setting up this board right, but, looking back and being wise after the event, it was an action which was long overdue. It should have been included in the original sanctions.
I would also say that informed opinion in business circles with which I come into

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contact is strongly in support of any such action as this, which will be effective and will result in helping to restore constitutional government in Southern Rhodesia. Therefore, I welcome it, and I should like to take this opportunity of congratulating the members of the new board, under Sir Sidney Caine, whose immediate comprehension of the real issues at stake here has been extremely welcome and very much in contrast to the speeches made in other quarters, which tend to try to undermine the national policy and give indirect and unwitting support to the illegal regime in Rhodesia. I am glad that the Government took the opportunity of getting such people to sit on this board.
But, having said this, I would follow the noble and learned Viscount, Lord Dilhorne, and say that in my view we ought to have a clearer statement as to how the board propose to carry out their function. The speech on this matter by the First Secretary in another place was, if I may say so, a masterpiece in camouflage. I think that this is a mistake. The Government are more likely to get public opinion behind a common policy if they expound the policy of the board in some detail, rather than try to hide it, as appeared to be the case, even if it was not done deliberately, in another place.
Am I right in thinking that the overriding consideration of the new board will be to discover, first of all, all the foreign assets of the Rhodesian Reserve Bank, and secondly, to assert title to them so that they can be preserved in the interests of the people of Rhodesia as a whole and denied to the illegal Smith régime. I should like to know, if this is so, what Rhodesia is going to use to pay for its essential imports? I ask this because I want to know how effective this action is going to be—because I want it to be effective. I want to know from the Government if they can tell us whether this has had any effect since it started on December 7. I should also like to know what was meant by the noble Lord, Lord Beswick, when he said that the internal affairs of the Bank are operating normally in Salisbury. This I cannot understand. Could we have some clarification of this point, because it looks to me as if these sanctions are not so effective as many of us would like to see them be.
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Am I also right in thinking that the funds now in the possession of the new board, held in the name of Rhodesia, can he used for some commercial purposes, provided that they do not help the illegal régime? It is important to know this. Would it not be worth while considering whether certain transactions might be undertaken—for instance, the payment of interest on Rhodesian stocks, which are in the category of trustee stocks? I would suggest, as the noble and learned Viscount, Lord Dilhorne, did, that if this payment were made to non-residents of Rhodesia, nothing would be done to help the illegal Smith regime. Of course I can see the objection to paying out to residents in Rhodesia, because that would help the illegal régime.
Could we not earmark the interest which would be due to residents in Rhodesia so as to show that it is there for them when constitutional government is restored in Rhodesia? It might possibly be worth while paying interest on the interest while it is in the bank, as a token gesture of good will. If there is some reason against this, something which would weaken the effectiveness of a sanction of this sort, then I withdraw the suggestion; but, if not, it seems to me that it might be worth while considering. I think that I am right in saying that there are about three of these trustee stocks which are due in December, and that practically nothing more is due until about July of next year. So it might be worth while looking into it.
LORD BESWICK: My Lords, may I make it clear that, whatever may be the justice in what the noble Lord is now saying about the general interest in these stocks in the Bank, in these Orders no power is given to the Secretary of State to direct that interest shall be paid.
LORD BYERS: My Lords, in that case, may I ask how interest came to be paid before U.D.I.? Was it not, in fact, a power invested in the old Federal Reserve Bank? I gather that it was not. Perhaps we could have an answer on that point later. Somebody must be responsible and authorised to pay this interest, if it is so decided by the Government. Whether this is a technicality or not, I think that the position might be cleared up.
I should like to see it made clear that the United Kingdom Government are

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really acting as the generous custodian of the interests of individuals in Rhodesia, who are being prevented from enjoying their full rights only by the illegality of the unileral declaration of independence by Mr. Smith. I believe that it is vital, in making sanctions effective, that the British Government should make it clear that only the illegal régime stands in the way of the complete restoration of the status quo and that, in the meantime, the British Government must be seen to be preserving in full measure the proper entitlement of Rhodesian residents in respect of contracts which were properly entered into before U.D.I. It is important that, on reaching the stage in which sanctions begin to bite. the Rhodesian people as a whole should come to realise that their real grievance lies with Smith for proclaiming U.D.I. and not with the British Government for resisting an illegal act.
Furthermore, I would say that if sanctions are to be effective—and I hope they will be—we have the responsibility to start indicating to the Rhodesian people in a positive fashion exactly how they can return to constitutional government under different leaders on a basis which will offer genuine political stability and protection of minority interests, whether they be European, African or Asian. I believe that this is a great task. It is all related to Orders of this type. I hope that we shall not accept the doctrine of unconditional surrender. I hope that we shall make it clear that there is an alternative. But during the period in between, let us make it crystal clear that we will protect and safeguard the interests of the Rhodesian people in the proper way, as the Government have done. I hope that when the noble Lord, Lord Shepherd, comes to reply, he will be able to tell us that everything will be done to make action such as this effective, so that the time between now and the restoration of constitutional government is the shortest possible.
3.28 p.m.
LORD COLYTON:` My Lords, before addressing myself to these Orders, I should like, with the permission of the House, to make some brief remarks of a rather more general character. Watching the course of the Government's actions on sanctions against Rhodesia over the past few weeks, I have been struck by
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two points. I am not now referring to oil sanctions, which I understand we shall have an opportunity of discussing to-morrow, but to such matters as the ban on the payment of pensions, the ban on the payment of insurance benefits, and now this attempt to grab the assets of the Rhodesian Reserve Bank.
It seems to me that these actions are calculated to do the maximum damage, first of all, to individuals in Rhodesia, as opposed to Mr. Smith's Government, and secondly, to Britain. In the case of individual Rhodesians, the damage is of such a cruel and petty character that one really cannot imagine that any British Government could set their hand to it. It has in fact become a form of persecution, far removed from the measures that the Prime Minister outlined in his speeches in another place on October 11 and 12.
As regards the damage to ourselves, it seems to me that the Government have embarked upon a most dangerous path, which can have repercussions of the widest character, which we cannot even visualise at the present time. It seems to me that they strike at our position as one of the great central reserve bankers of the world, as the greatest centre of insurance of the world and as a people who, for all our shortcomings in other respects, have always regarded the fulfilment of our financial obligations as a matter of honour from which we could not in any circumstances depart. I do not want to exaggerate these matters, but there can, I fear, be no doubt, whatever may be said to the contrary, that our position has been altered by these events, and our reputation damaged.
I turn now to the Orders. As noble Lords who have followed these debates are well aware—and again, in deference to the noble Earl the Leader of the House, I must mention—that I am a director of a company with a small proportion of its interests in Rhodesia. So far as I can gather, these interests will not be affected in any way by these Orders, but I nevertheless declare them. Both these Orders, it seems to me, illustrate in the highest degree what I mean when I speak of the damage done to our reputation as the central bankers of the sterling area. This is a serious matter. For the first time, except of course during time of war, a British Government have laid their hands (whether you put it like that

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or not) on funds deposited in all good faith in London. Such funds were not interfered with when Colonel Nasser violated the Suez Canal Convention of 1889, and subsequently sequestrated the property of thousands of British subjects in Egypt. I have been told I do not know whether it is right or wrong—that similar funds belonging to the Boer Republics were not interfered with in any way during the South African War. And I believe that it is also a fact that even during the American revolutionary war General George Washington's personal bank account in London was never touched.
No doubt this is all, strictly speaking, absolutely legal, having regard to the powers which the Government have been given by Parliament. But my point is that, whether it is legal or not, it is unethical, immoral and unjust; and I fear it will be remembered years after this problem of Rhodesia has been settled, for better or worse, one way or another. I am bound to say that I regard it as sheer humbug on the part of the Chief Secretary to talk as he did in another place last week about safeguarding the interests of the people of Rhodesia. These funds belong to the people of Rhodesia. These balances are their accumulated savings, the results of their overseas trade, the produce of taxation, and they were mainly earned by the very people who are now wholeheartedly supporting the illegal régime in Rhodesia.
The Government's action is not limited to laying their hands on balances in this country; they are also seeking to get control of the Rhodesian balances held elsewhere in the world. However legal their action may be under the domestic or municipal law of this country, there still seems to be a great deal of doubt about its legality outside this country. The Chief Secretary said last Tuesday that in certain countries the need to consult legal opinion had led to the funds of the Rhodesian Reserve Bank being frozen. Then he went on to say, I thought rather smacking his lips, as he did so, that this was:
"an equally satisfactory way of denying the use of these funds to the illegal régime".[OFFICIAL REPORT, Commons, Vol. 722 (No.
676), col. 1152, 14/12/65.]
What grounds were there for dismissing the governor and the directors of the
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Rhodesian Reserve Bank, who were nonpolitical appointees, and to substitute for them the group of no doubt very eminent and distinguished gentlemen in this country? It was simply, I take it, that the members of the board in Rhodesia could be relied upon to carry out certain orders of Mr. Smith's Government. But that applies equally to thousands of civil servants, soldiers and airmen and many others. If my information is correct—and if it is not, I will withdraw it immediately—the greatest pressure had to be brought to bear on these eminent gentlemen to serve on this board. I feel that it must be most uncongenial for them, and I am extremely sorry for them.
THE EARL OF LONGFORD: My Lords, I am afraid my attention was somewhat distracted. Did I hear the noble Lord say that the greatest pressure had to be brought to bear on them?
LORD COLYTON: Yes.
THE EARL OF LONGFORD: Could the noble Lord disclose the nature of this pressure?
LORD COLYTON: I will not go into details, but I have heard it said that great pressure had to be brought to bear on these gentlemen. I leave it at that. The Chief Secretary, in winding up the debate in another place, said that this board in London would have all the powers conferred upon it by the 1964 Rhodesia Act. What action has it taken to carry out these powers in regard to the day-to-day running of the Bank where, as the Chief Secretary and the Minister this afternoon said, the chief cashier and other officers of the Bank had not had their tenure of office affected by Her Majesty's Government's action? The Chief Secretary talked a great deal about the Bank having to obey the orders of its customers. Who are those customers? Is it Mr. Smith's Government? Or is it the British Government? He said:
"No Bank proceeds to dispose of the money which it holds without the request of its customers."—[Col. 1203.]
If so, and if it is not the British Government or the Secretary of State for Commonwealth Relations, who are the customers of the Bank? And why is the new board attempting to take control of Rhodesian balances here and elsewhere?

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This brings me to the crucial point mentioned by my noble and learned friend Lord Dilhorne. Mr. Smith, very naturally after this latest move on the part of Her Majesty's Government, has said that the Rhodesian Government cannot fulfil its obligations to pay the interest on its external loans, apart from those that may be held in Rhodesia. This is a most serious matter. This is the first time in history that there has ever been a default on a Commonwealth loan, and, of course, on obligations which are trustee security stocks. As I say, it is a serious matter, and again not calculated to enhance our financial reputation in the world. It would not have been so bad if the British Government, having taken this action, had stepped in and said that they would themselves service these external loans. I believe that the interest amounts to well over £1 million a year. But the Chief Secretary said, and the Minister has repeated it this afternoon, that the British Government have categorically refused to accept any responsibility for servicing these loans.
Many of your Lordships will recollect that the question of the servicing of these loans was the subject of great pressure on the then Government by many of us in this House and elsewhere when the breakup of the Federation was being discussed at the end of 1963. We felt that, having regard to the way in which these Federal loans had been divided up in three tranches between the three territories, there was a duty on the part of the British Government to guarantee these loans or, at any rate, to underpin them in some way. The Government at that time refused to accept our plea. Now we are seeing the tragic results of their not doing so. What it means, in fact, is that thousands of small investors in this country. in addition to the banks and corporations, insurance companies and their policy holders, are now to be deprived of their rightful dividends.
The Chief Secretary said last week:
"It is absolutely inaccurate … that we, the British Government own the assets or the funds of the Reserve Bank of Rhodesia." [Col. 1207.]
Who then does own those assets? It surely must be the legal Government of Rhodesia. Who is the legal Government? Is it Her Majesty's Government, or is
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it not? I thought that we were told on November 24 that the legal Government of Rhodesia was now vested in the Secretary of State, acting either directly or through the Governor or other officials
LORD SHEPHERD: My Lords, I feel that I should correct the noble Lord and say to him that it is clear that the Government are not the Government of Southern Rhodesia. It is perfectly clear, if one looks at the Statute and the various statements that have been made by Ministers.
LORD COLYTON: Then who is the Government of Rhodesia? Perhaps the noble Lord will be able to inform us about that when he comes to reply. I certainly was under the impression that the Government of Rhodesia was now vested in the Secretary of State. I was quite clear in my own mind.
VISCOUNT DILHORNE: My Lords, if my noble friend will forgive me for interrupting, may I say that the provision of the Constitution Order in terms says that the executive powers of the Southern Rhodesian Government can be exercised by the Secretary of State. It is not saying that the Secretary of State is himself the Rhodesian Government or that he can do under that Order what that Government could do. It is not quite the same.
LORD COLYTON: My Lords, I thank my noble friend for that informative intervention. I should like to say this. I read the debate in another place with great care, and the Chief Secretary was again and again pressed to say to whom the Reserve Bank did belong. As a matter of fact, he was finally saved from having to answer by the Question being put from the Chair at the end of the debate. Can we have a clear answer to this Question to-day? The Chief Secretary stated categorically that the Reserve Bank was an agent of its customers. But who are those customers? Again, I presume it is the Government of Rhodesia. But, surely, if we are the Government of Rhodesia, as I understood it, or if we act for the Government of Rhodesia, it becomes our responsibility to service these loans. I do not see how the Government can have it both ways.
As most of your Lordships know, I have always been opposed to sanctions against Rhodesia, except for those which were

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consequential on the illegal declaration of independence. I have never concealed my views in these matters. But from the Government's point of view, however, the actions to which I have referred, damaging as they are to our credit and our reputation and, it seems to me, cruel and vindictive towards individuals, could only conceivably be justified if it could be shown that there is any likelihood of their helping to achieve the aim which the Government have set themselves; that is to say, to bring about the return of law and order in Rhodesia (whatever that may mean) and, more important, to secure the restoration of the constitutional relationship between Rhodesia and the Crown and, we hope, her return to the Commonwealth.
All these measures—and this, of course, applies perhaps even more so to oil sanctions—are merely calculated to drive Mr. Smith and the Rhodesian people including (and this is my information from Rhodesia) a great many moderate Africans, and the whole of the coloured community, along the path which, rightly or wrongly, their Government chose for them. We must not forget the fact that most of the people whom Her Majesty's Government are seeking to coerce into what I can only describe as unconditional surrender are men and women of British stock. The few who are not are of Dutch and Afrikaner stock, and if there is one person who is more obstinate than the British when it comes to being pushed around it is the Dutchman or the Afrikaner. These people feel to-day exactly as we did in 1940. They feel that they are right, and although the whole of the world may turn against them they will not surrender. It is perfectly clear from all the information which one receives from Rhodesia, and particularly from circles who were violently anti-Smith and opposed to U.D.I., that day by day they are becoming more and more determined not to give way. Measures such as these which are taken against them can serve only to enhance their determination.
What is worse is that these measures are giving rise to a new bitterness which, when the time comes to negotiate, as it surely will, will make the task increasingly difficult. I do not believe that at present that bitterness is directed against the British people, thank God, but it is directed against Her Majesty's
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Government and, I fear, particularly against the Prime Minister. I think that the people of this country—I have tried to find out what people think about these things, talking to them in the streets, shops and trains—are bewildered by all this. I think their sympathy is basically with Mr. Smith. They cannot understand what they regard as petty and vindictive acts being taken against him, and it is driving them in the same sort of direction as it is driving the people of Rhodesia.
Having regard to all these factors, I urge the Government. I beg them, to turn to the path of conciliation and negotiation, and to turn to it rapidly, before we drift into some sort of situation from which there is no retreat. I fear the worst as I read the news every day, and I beg the Government to turn their minds to the course of conciliation and negotiation; and, in doing so, I urge them—I do not expect them to agree with me—to drop this measure which is so very dangerous from the point of view of the people of Rhodesia, those people whom we are trying to bring back into the paths of constitutional life.

BRITISH AIRCRAFT FOR SAUDI ARABIA
3.45 p.m.
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, my noble friend Lord Champion stated that he would be making the Statement on Lightnings for Saudi Arabia, since it was not certain that I should be able to attend your Lordships' House. Now, with your Lordships' permission, I should like to intervene to repeat the Statement, which is being made by my honourable friend the Parliamentary Secretary to the Ministry of Aviation in another place, on Lightnings for Saudi Arabia. The Statement is as follows:
"I have to tell the House that the Government of Saudi Arabia have this morning announced that a consortium of British firms has secured the major part of the order for their new complete Air Defence System. The remainder of the system will be provided by American firms and we have had valuable co-operation from the U.S. Administration in formulating the joint programme.

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"The value of the British components in the order, including Lightning and Jet Provost aircraft, radar and data-handling equipment, is over £100 million, from which over £75 million will accrue to this country as export earnings.
"This is a great achievement for the three British firms concerned—namely, the British Aircraft Corporation Limited, Associated Electrical Industries Limited, and Airwork Services Limited, and it demonstrates that our aircraft and electronics industries have really first-class equipment to offer.
"The American firm of Raytheon will be supplying the Hawk surface-to-air anti-aircraft missile.
"During the past twelve months the British firms have acted in close cooperation with my Department—that is, the Ministry of Aviation—and have received our active support. The success of these negotiations has demonstrated conclusively the results which can be achieved with such co-operation.
"A number of other countries have already expressed interest in the Lightning aircraft and the radar equipment and I have great hopes that further orders will be obtained."
VISCOUNT DILHORNE: My Lords, I am sure the House is grateful to the noble Lord for conveying to the House this very welcome information and, indeed, for the tribute he paid to what has been achieved by three companies engaged in private enterprise.
LORD BLYTON: My Lords, might I congratulate the Government on getting this contract? I led a delegation this year meeting King Feisal and the Saudi Arabian Defence Minister, which discussed this matter; and I am glad to learn that, in spite of all the competition, we have succeeded in getting such a reward for our endeavours.
LORD SHACKLETON: My Lords, first of all, I should like to thank the noble and learned Viscount. This represents a good example of co-operation in Government and private enterprise. I should like to pay a tribute to the officials in the Ministry of Aviation—I have already paid tribute to the firms—and in particular to my colleague Mr. John
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Stonehouse, who I know played a very big part in landing this order. At the same time—and I am not just here to hand out bouquets—I would acknowledge the part that my noble friend Lord Blyton and his delegation played. It demonstrates the value of the sort of contacts that it is possible for a delegation such as Lord Blyton's to achieve.
THE DUKE OF DEVONSHIRE: My Lords, is this not clear evidence that the British aircraft industry is capable of fending for itself, without needing the dead hand of nationalisation to help it out? Since there is no answer, may I take it that the noble Lord agrees with me?
LORD SHACKLETON: The noble Duke w as determined to get me to my feet. His point does not arise on this Statement at all, and I certainly do not agree with the implications of what he said.

SOUTHERN RHODESIA (BANK ASSETS) ORDER 1965
3.50 p.m.
Debate resumed.
LORD CONESFORD: My Lords, in the debate of November 15, I endeavoured to make clear what my attitude was to sanctions in the case of the illegal Government of Rhodesia. I expressed my fear that Her Majesty's Government were not asking themselves what I believed to be the most important question, which was whether the sanctions that they were considering were in fact calculated to bring about the results they desired. The noble Lord who commended these Orders this afternoon said he hoped the sole question we should raise would be that of effectiveness. I make no complaint of that, but I think there is some danger of the word "effective" being used in two quite different senses. Sometimes these sanctions are recommended as being effective when by "effective" the speaker means "drastic". Provided they are sufficiently drastic it is assumed that they will be effective. What I mean by "effective" is, calculated to bring about the object that the Government have proclaimed.
On November 15 I ventured to quote what the Prime Minister himself had said, and I expressed my doubts whether

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some of the sanctions were calculated to bring about the desired result. I notice the most recent statement of the aim of the Government appears in the terms of an Amendment to a Motion tabled in another place, and, if I may quote the words describing their sanctions, they are
"designed to secure the return of Rhodesia to constitutional rule".
I think it will be agreed on all sides that this is the proclaimed objective of Her Majesty's Government.
I share with my noble friend whose speech preceded mine an increasing alarm at the series of sanctions which I believe, taken cumulatively, are really approaching a state of war between this country and Rhodesia—and a state of war without even some of the few hopeful things consistent with war. There was a passage in the speech made by the noble Lord who commended these Orders this afternoon in which he made some violent remarks about Mr. Smith. I am not going to say whether or not they were justified. I merely believe that, if negotiations are desirable, for the two sides to call each other names is not going to help. But the noble Lord used language which has been used by the Chancellor of the Exchequer in another place when he was dealing with insurance contracts, which had reference to the parallels of war and even its justifications.
There is one very great difference between war and our position vis-à-vis Rhodesia. It is this: that when you are at war you do at least recognise the Government against which you are fighting. That is extremely important. Naturally, when you are engaged in war and fighting another Government, you seek to deprive it of all means that could strengthen it, and there are the ordinary consequences of war with which we are familiar, such as the frustration of insurance contracts, and so on. But, as between us and Rhodesia, the Prime Minister has said repeatedly that he desires that the effect of our sanctions shall be such that other people in Rhodesia become dissatisfied with Mr. Smith and approach the Governor, proposing a Government that they and we should prefer. If that is the object, to treat Rhodesia to a series of measures which appear to have been designed to inflict the maximum of economic damage may not in the least
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tend to bring about the result which Her Majesty's Government desire.
I generally credit my political opponents with complete honesty in these matters and I am going to assume that the object of the Government is that which they declare. What I question is whether these cumulative sanctions that they are imposing are in the least likely to bring about the desired result. A more likely probability is that they will increasingly unite even the former opponents of Mr. Smith behind him, and in fact an article in the current issue of the Economist, which has hitherto been taking a strongly pro-Government view on sanctions, expresses the fear that now even some of the trading community and others who were very much opposed to a U.D.I. are lining themselves up behind Mr. Smith because it is felt that any questioning of Mr. Smith and his Government is almost like treason.
Taking the view I do of the dangers of the course on which the Government have embarked, I thought it right to express those doubts and fears to the House because I feel them most strongly, but I come now to the specific point raised by my noble and learned friend Lord Dilhorne and others, though I am going to put it in a slightly different way. It concerns the Southern Rhodesian stocks. I think the noble and learned Viscount, Lord Dilhorne, thought that the power of direction in paragraph 3(e) could be exercised so as to enable payment of interest to be made from these funds. I am not going to argue for one moment whether that is right or wrong, though coming from my noble and learned friend, of course, I treat that view with great respect. But I can understand the other view being taken, that, though there are powers of direction, they should be limited to what would otherwise be proper in dealing with these Bank assets. I can understand either view; but my point on these loans does not depend on that in the least. Nor am I concerned with the hardship caused by not paying interest on these loans. What I am concerned with is the credit of Her Majesty's Government.
I want to put the point absolutely simply. These loans are the debts of the legitimate Government of Rhodesia. I take it that is agreed. I imagine Her Majesty's Government think that the conception of a legitimate Government in

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Rhodesia is not merely a myth. There is such a thing. In fact, if I might quote one statement by the Prime Minister, which I quoted on November 15, he referred to "the only legal 'Government' there, the Governor". My noble and learned friend Lord Dilhorne has quoted from another constitutional Order that has been made, showing that the Secretary of State has executive power to act as the legitimate "Government" of Rhodesia. If you get these two things in regard to this stock (it is a trustee security of course), that it is a debt of the legitimate Government of Rhodesia and that we have power—in fact we are always asserting we have power—to exercise the powers of the legitimate Government of Rhodesia, why is it that we have not paid the interest? That question is quite independent of the question from what funds that interest should be paid. But if that is an obligation on Her Majesty's Government, it ought to be discharged.
Perhaps I may give quotations to show that it is not merely I who have these doubts. In the debate in another place the other day there was a quotation from the City Editor of The Times, who said this:
"It is, however, an unhappy precedent, as are so many others, as it looks like being the first time ever that there has been a default on any British or Commonwealth stock."
That is not a matter of trivial importance. Nor is it only The Times and I who are saying this. Let me quote what the Economist said, not in the current number but last week. After dealing with other matters with which I will not trouble the House, they say this:
"Leaving the meaningless technicalities aside, the interest should surely have been paid. Either London is responsible for Rhodesia or it is not."
I do not think anything could be clearer. I hope I have made the point that I am asking reasonably clear. It is three propositions: that this is a debt owed by the lawful Government of Rhodesia; the Secretary of State has all powers to act as the lawful "Government" of Rhodesia; why are these debts not being paid? I hope that will be answered.
The other matter I should like to raise is that the noble Lord who introduced these Orders twice observed—and I think
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I see the force of his remark—that whatever merits there may be in these points I am making, he thinks they do not arise directly out of the Orders before the House.
LORD BESWICK: My Lords, the noble Lord is perfectly entitled to quote me, but I think he is wrong in saying what I think. It is not a question of what I think, but of what I am advised by the legal advisers of Her Majesty's Government.
LORD CONESFORD: I am sorry if I put it wrongly. I entirely agree with the noble Lord that that was the impression made to the House. I did not mean to imply anything to the contrary. The noble Lord was making quite clear in his submission, what was the advice of his Department.
I was now coming to the relevance of these Orders. I can understand the submission that the point I am now raising does not arise directly out of these Orders. But, of course, it is very closely connected because this Order, which, as the Economist last week pointed out, is an extremely effective Order—it is perhaps the most effective Order which has yet been made by Her Majesty's Government in depriving the de facto Government of Rhodesia of its ability to get hold of sterling—provides an excuse for the de facto Government of Rhodesia to do nothing about the loans. It accentuates, if I may say so, our responsibility.
There is also another result. I forget if it was the noble Lord, Lord Byers, or somebody else who hoped that these sanctions would deprive the de facto Government of Rhodesia of its means to carry on, and so forth. But, of course, the trouble about these sanctions is that you not only hit those you wish to hit; you hit some you do not wish to hit at all. What has happened? The de facto Government of Rhodesia, deprived by these sanctions of a great deal of the assets on which it would otherwise rely, takes immediate steps, through raising the price of coal and putting a duty on coal, calculated to cause disaster to Zambia. I beg Her Majesty's Government to consider two things. First of all, is this series of sanctions tending to produce the result they want—that is, to cause the people of Rhodesia to desire, or work for, a

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different Government? And, secondly, what effect are they having on third parties, and third parties whom we certainly do not wish to injure?
May I mention, since it has been mentioned in the course of this debate, the insurance question? HerMajesty's Government, I know, are trying to make some of the so-called sanctions sanctions which will be followed by other countries, too. But nobody supposes that any other country is going to prohibit payment under its insurance contracts. I should like to know, should the noble Lord who is going to reply have any information on this subject, whether it is true (I heard it as a rumour during the last two days) that certain foreign countries, in their propaganda in Rhodesia and elsewhere, are claiming that they pay on their own insurance contracts but that Lloyd's do not.
I regard these threats to our interests as very serious. I do not wish to lengthen the debate on this matter, because on the main question of sanctions, perhaps, to-morrow's debate provides an even better opportunity. But I hope that on the one specific question about the interest on these Rhodesian loans, we shall have a perfectly clear reply.
4.10 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I have never spoken in your Lordships' House on Rhodesia. I have known Rhodesia in peace time and I have had much to do with Rhodesia in war time. I have listened with increasing distress over the months which have passed to the sorry tale which your Lordships have heard. There comes a time when, if a man is going to live with himself and he feels deeply upon some subject, he must make those views known. The discussion of these matters to-day gives me a chance for a few moments to express my views. Like most other noble Lords, I should think all noble Lords in this House, I shared the regret at the illegal Declaration of Independence, but with a measure of sympathy for those who truly felt they were the victims of a long period of "double think" and "double talk" by successive British Governments. Even after that illegal declaration, I shared the view which I am sure the majority of your Lordships had, and I believe millions of people felt outside, that the position was not lost. But now,
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step by step, it seems to me that we are slipping to a state of war, and these Orders are further steps in that direction.
For this Order and for all preceding Orders dealing with sanctions, the Prime Minister's defence has been twofold: quick sanctions which will hurt; an alternative to force. That is the first defence. The second defence has been the prevention of foreign intervention in that territory. We know of the possibility that the Prime Miniter talked of, of red berets and blue United Nations uniforms. What is the position now in relation to that dual defence? There are to-day the veiled threats of a United Nations blockade, if required, upon Portuguese East Africa—a blockade which Britain would be forced to take part in if the United Nations so wish. Secondly, as regards foreign intervention, we ourselves have invited a foreign Power to come in and assist us with the airlift, in the form of American transport aircraft. It is these contradictions which so alarm me when looking at the present situation. I believe that, sooner or later, a Government —this Government or another Government—will have to negotiate, and with Mr. Smith. I believe that the sooner we start, the better it will be.
This Order is not going to have an effect against rebels, against traitors, against men of treason—those stupid words which are bandied about far too lightly and far too easily. This Order is against a body of British citizens, exasperated and determined people, who feel they wish to rebel against the policy of the British Government, at present backed by a majority in Parliament. This talk of rebels—rebels against whom? Not against Her Majesty. But rebels against a policy which they believe would bring disaster to their country. And they see the example of the Belgian Congo next door, which bears so heavily upon their minds.
On the effect of these Orders we, too, like the Government, have our sources of impartial, disinterested information from Rhodesia. I would summarise the information I have tried to gather under four points. The first is that there has been a great change in Rhodesia since the sanctions policy by this Government has been put into effect. Between July and September last many business interests in Rhodesia were antagonistic to

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Mr. Smith. To-day, Mr. Smith probably carries 95 per cent. of the Europeans behind him. Secondly, the territorial sanctity of Rhodesia is something that every Rhodesian man and woman—and do not forget the women—would definitely fight for. Thirdly, there is no force in the illusion the Prime Minister seems to hold—I can only conclude this from the words I have listened to in his speeches, and from reading them—that suddenly some middle-of-the-road white Liberal is going to arise and gather a measure of strength which will be sufficient to overthrow the Smith regime. That is not so. Rightly or wrongly, the Europeans are behind Mr. Smith to-day.
Finally, let me say that they are never going to surrender. The sanctions may bite. The sanctions will bite. In March next, I think they will bite harshly. But I hope the Government realise that there is still a pioneer spirit in that country. They will pull in their belts and will not surrender. So I come back to the point that, sooner or later, Her Majesty's Government will have to negotiate with Mr. Smith; and for the sake of the whole outside world, the Commonwealth, Rhodesia and ourselves, the sooner the better. It seems to me that a rather dangerous impression is gaining ground that this Order and others are part of a sort of personal conflict between Mr. Wilson and Mr. Smith, and that Mr. Wilson has nailed his colours to the mast and that there is marked on them "Unconditional surrender!". I think that was partly caused by the regrettable language which the Prime Minister used in speaking of Mr. Smith, then the Prime Minister of Rhodesia, and his colleagues as "frightened men". They may be misguided men; they may be obstinate men. But Mr. Smith fought in a Spitfire over Italy and was shot down. Mr. Harper led a Royal Air Force wing. These men are not lacking in courage; they are not frightened men.
No one, except a few here and, I believe, a few in Rhodesia, wishes to perpetuate white supremacy. That is not the issue. The issue is the speed with which the 1961 Constitution provisions shall be implemented. There is a lot of silliness in Rhodesia, their best friends will say, in the way of stupid racial discrimination which must be abandoned.
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But there is a great deal of good sense, and good men there who are allied to Mr. Smith and who are being more and more alienated. This Order and the oil sanctions Order which your Lordships will be debating soon will, I hope, be the last Orders on the road towards a conflict in which all might be involved. Let this Order be the last, and let it mark the start of talking around a table with the men in power.
I conclude by one prophesy to your Lordships—namely, that any Government in this country, of whatever political complexion, if it once allies itself to a policy which allows white man to shoot at white man, will, by a great upsurge of public opinion, be out within twenty-four hours, and I believe deservedly so.
4.20 p.m.
LORD BARNBY: My Lords, like most of your Lordships, I came into this Chamber this afternoon with a sense of great responsibility and great complexity; and I am compelled to intervene because I feel strongly that the Government are fooling themselves in thinking that these measures are wise. The noble and learned Viscount who spoke for the Opposition put a great number of points, which doubtless will be answered. I say that, because those of us who have assiduously read the report of the debate on these measures in the other Chamber, could not help feeling that there was a great deal of evasion. There were answers of a kind, but the Government certainly did not give direct answers to what was asked.
The original Act establishing the Rhodesian Reserve Bank is quite a complicated one, and doubtless it covers all the things that should be covered. The point I want to make is that I feel that the results of this action by the Government are without doubt going to have a very bad effect throughout the world on confidence in sterling, and in British insurance, and the propriety of actions interfering with that confidence must be considered. The Order is, of course, virtually equivalent to what was introduced when war broke out the last time. Technically, I suppose, we are in a state of war, and this Government are given power to do anything they like.
THE EARL OF LONGFORD: My Lords, I leave it to lawyers present to

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explain to the noble Lord the technicalities, but we are certainly not technically in a state of war with Rhodesia. They are technically in a state of rebellion.
LORD BARNBY: My Lords, I understood the noble Lord the Government Chief Whip to say that the exercise was to bring Rhodesia back into the Commonwealth. One wonders which other States intend leaving the Commonwealth. But the noble Earl the Leader of the House has raised a technical point. I repeat that there will be widespread repercussions in all circles which have regard for the historical responsibility of sterling, and, of course, in circles concerned with insurances and premiums and matters of that kind.
I say that because through a long life I have been in touch with considerable financial and banking operations, and I am satisfied that Governments cannot pass Orders like this without introducing a great deal of confusion. The financial Press this morning emphasises what confusion is being caused. It must break out everywhere, and the Order is therefore dangerous. The effect on insurances with regard to the delays in payment of premiums is equally dangerous.
Of course, this situation is unique. There has never before been a suspension of a Reserve Bank. After all, the Reserve Bank is of relatively recent introduction. There was no Reserve Bank in the United States until 1932, and until then banks did not even guarantee deposits. New Zealand, for instance, had no Reserve Bank until quite recently, so the Government are now seeking to upset a new mechanism. That causes great surprise. Incidentally, we have all these difficulties about who is what, who is the Government and so on; but I cannot help reflecting that, although United States policy has been progressively to encourage de-colonialisation, we now have the humorous situation that the United States Government is reported to be strongly in support of a policy which apparently is going to restore to London the administration of a certain part of what, in spite of what has been said, is still the Commonwealth.
I hope that, in replying, the noble Lord, Lord Shepherd, will deal with a question which was put to the Chief Secre-
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tary in another place, but which was not answered—namely:
"who is the customer of the Reserve Bank of Rhodesia? Is that customer the Governor of Rhodesia? Are we the Government of Rhodesia?"—[OFFICIAL REPORT, Commons, Vol. 722 (No. 26), col. 1208, 14/12/65.]
The point I want to emphasise is that the Government should remember, as my noble friend Lord Coleraine has said, that they have got a tiger by the tail, and this is not a very good way of dealing with it. I should like to associate myself with the remarks of my noble friend Lord Colyton, and of my noble friend Lord Balfour of Inchrye. I have read very carefully the Report of the debate in another place, and many points were put there which do not appear to have been answered.
The noble and learned Viscount has put a great number of points here. I should like to conclude by confirming what I believe is the situation to-day. Whatever intensification there is in the actions announced against Rhodesia, it will only strengthen the resolution of the Afrikaner population of Rhodesia to resist. The Government are only fooling themselves if they do not recognise what is human nature, and what we should want to be the case if it were Britain and they were Britons, rebellion or no rebellion. They believe that Rhodesia is their country, and they see nearby what has happened in the Congo with the withdrawal of normal government. So in that tone I appeal to the Government to realise that negotiation is now the best policy. Coercion will not achieve the desired result.
4.28 p.m.
LORD REAY: My Lords, the single logic of the successive measures introduced by Her Majesty's Government in respect of Rhodesia, subsequent to Smith's declaration of independence, has been to bring the Rhodesian Front, or some plausible political alternative, to sue for terms by temporarily destroying that country's capacity to continue as a trading nation. From the initial sanction of the withdrawal of Commonwealth Preference, to the sanction on tobacco, to the initial discretionary control of Rhodesia's reserves held in London, to the almost complete freezing of all those reserves—these have had the single objective of denying that country foreign

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exchange with which to enable it to finance its imports. What we now need is more information on which to judge how fully these sanctions, designed to reduce the availability of foreign exchange to the Rhodesian Front, are operating, and a scrutiny of where further pressure might be applied.
In the first place, I should like to ask Her Majesty's Government whether they will reveal the extent to which the board of the Reserve Bank of Rhodesia have succeeded in locating the Rhodesian reserves held overseas, and whether the board would publish a statement of the Rhodesian reserves—their total and their distribution. It was the policy of the Reserve Bank of Rhodesia, under the old board, to publish a statement of the reserves each week. Could we also have an assurance that these reserves are nowhere available for use by the Rhodesian Front, and that, if foreign commercial banks are found to be making funds available for such use, the Government will consider taking action in the courts of the appropriate country to claim those funds?
Secondly, would Her Majesty's Government consider the possibility of instructing the subsidiaries of British companies in Rhodesia to see that their foreign exchange earnings are not used for the purchase of imports into Rhodesia, but are turned over to the English parent company or to the Bank of England? Thirdly, would Her Majesty's Government look into the possibility of restricting the extension of internal credit in Rhodesia by the issue of instructions from the Reserve Bank (if this should be possible) to the commercial banks of Rhodesia to call in, for example, overdrafts? Fourthly, would Her Majesty's Government be prepared to direct the Board to devalue the Rhodesian pound? I should like to know if they would in any circumstances be prepared to do this; and, if so, in what circumstances. Finally, in view of the situation that has arisen on the board of the Central African Power Corporation, would the Government, in order that this board should continue to discharge its functions and responsibilities for the generation of electricity at Kariba, appoint three members to replace those three Rhodesian members whose resignations fall due today?
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It has been argued here, and has been very widely argued in another place, that Her Majesty's Government have already, by these Orders, destroyed that confidence in the integrity of this country to meet its obligations without which this country can no longer hope to continue its role as a hanker in the world. But whether this is so is not to be tested by describing the unprecedented character of the present situation: it is tested by watching the banking reactions of other countries to these events. If other countries were to cease to bank with us, were to cease to insure with us, if they became nervous at the mere hint of political trouble, then clearly there might be some cause for alarm. But there are reasons for not expecting this. First, this is, on any viewing, an exceptional occasion, of which other countries can hardly need persuading; but, if they did need persuasion, it should be the quite manageable duty of Her Majesty's Government to provide it. Secondly, there was very explicit warning. It was not by the unannounced severity of our retaliatory measures that other countries have been surprised. It was a unique event preceded by every warning of the most unambiguous nature.
We are at war with a country which we wish to defeat without resort to the use of military force. It is a situation which offers a horrifying potential of escalating responsibilities and costs. The cost of rescuing Zambia from destruction for each week that this lasts: of air-lifting oil, of organising coal, of restoring her economy ultimately; the risk of incapacity to the Copper Belt by sabotage, direct or indirect; the costs of imposing an oil blockade, which of course may be necessary; the outbreak of disorder in Zambia or in Rhodesia itself, which would equally certainly require military intervention, perhaps even the ultimate re-occupation of Rhodesia with our own police and troops, and their maintenance there for years—these dangers increase with the passage of each month, each week, each day.
There seems no comparison between these risks and the disputed fractions of notional integrity we allegedly put at hazard by any additional element of stringency in our financial measures. And certainly any element of confusion or

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timidity or carelessness in the consideration of the slightest detail of possible extra effective power derivable from or associated with these Orders would be as grave and regrettable an offence as if the issue were one of committing soldiers of this country to risk their lives—for that, of course, if we were to fail, is what it might always come to.
4.35 p.m.
LORD SALTER: My Lords, I do not intend to inflict a speech upon your Lordships now: I want only to express in a sentence or two the deep anxiety which I believe is now felt by many in this House and outside that the Government are taking one step after the other (of which the latest, but not perhaps the last, is now under discussion here) which will soon result in the Prime Minister finding himself in a position in which he cannot escape forcible aggression, against which practically all those on whom the present measure of government, stability and direction of the economy in Rhodesia depend will feel that they must unite to defend all that is dearest to them. I never questioned the sincerity of the Prime Minister when he stated, time after time, that he did not wish to use force, but I do gravely doubt, as I think many others do, whether he is not finding himself going along a course which will have that consequence, with further consequences on which I will not now dilate but which will be in all your Lordships' minds.
4.36 p.m.
LORD FRASER OF NORTH CAPE: My Lords, I intervene only because I have at times had under my command many Rhodesian people, and my admiration for them has been beyond measure. I believe most of us will think that Mr. Smith is much the same—a likeable, courageous, determined man. The fact remains that the law of England is that, whatever the provocation—and there may have been provocation from Her Majesty's Government—you are not allowed to take the law into your own hands; and that is what Mr. Smith has done. In consequence, every sort of sanction is entirely his responsibility.
Now a great deal has been said about the united support of the Rhodesians for Mr. Smith's Government. Unfortunately, if you have a likeable, courageous and
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determined leader people will blindly follow him. We have experienced that, of course, with our own Commanders-in-Chief. Armies and Navies will follow them blindly. If the Commander-in-Chief leads them to disaster, it is entirely his responsibility, in his own heart, soul and conscience. If we go back to the past, Napoleon, I suppose, had the support of the whole French people: he led them to disaster. Hitler, I suppose, had 95 per cent. German support: he led them to disaster. Mussolini had 95 per cent. Italian support: he led them to disaster. It is not the peoples: it is the leaders who are to blame.
In the case of Rhodesia, Mr. Smith is, as I have said, a likeable, courageous and determined man. I suppose no greater courage is required of a man than for him to retrace his steps. If Mr. Smith were to bring his country back to the legal position he would certainly, I think, by the suffering which he would thereby save, be worthy of the George Cross; and if he did that I think he would get the admiration and the sympathy of the whole world.
4.39 p.m.
THE EARL OF DUNDEE: My Lords, in the interests of Party unity on this question (which has been a little shaken, perhaps unintentionally, by some recent statements of Her Majesty's Government), and also in the interests of that objective on which I think we are all agreed—the early return of Rhodesia to constitutional government—I hope that the noble Lord, Lord Shepherd, who is going to reply for the Government, will answer clearly and unequivocally the questions which were put to him at the beginning of the debate by my noble and learned friend Lord Dilhorne.
I am going to refer very briefly to only one of those questions—the last one, concerning the payment of interest on the Rhodesian Government loan stock. I feel bound to say that I do not think it would have been necessary even to ask this question in your Lordships' House if it had been answered in another place. And the reason why it has been pressed strongly—and, in my view, rightly so—by nearly every noble Lord who has spoken this afternoon is that it was asked in another place repeatedly, clearly and

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politely, but the reply of the official Government spokesman was one which I can only describe as an impenetrable smokescreen of verbosity. I am sure that the noble Lord, Lord Shepherd, is altogether incapable of employing a defensive weapon of this kind.
It really is not good enough to tell us that it is outside the scope of this Order; because paragraph 3(e) of the second Order (No. 2049), which I look upon as the most important paragraph, states that:
"the Secretary of State may from time to time give to the Governor or to the Deputy Governor or to any other director or (through the Governor or Deputy Governor) to the Board such general or special directions relating to the policy of the Bank or the conduct of its business as he may think fit and it shall be the duty of every person to whom any such directions are given to comply with them."
Nor, my Lords, do I think it is good enough to tell us simply that we are not the Government of Rhodesia. That may be technically true; but, surely, we hold the view that the present de facto Government of Rhodesia is an illegal Government; and, surely, it was because we regarded it as an illegal Government that the Southern Rhodesia Constitution Order of November 16 was issued. This Order, in paragraph 4, provides that:
"the executive authority of Southern Rhodesia may be exercised on Her Majesty's behalf by a Secretary of State".
Then, in sub-paragraph (d) it says:
"a Secretary of State may exercise any function that is vested by the Constitution or any other law in force in Southern Rhodesia in a Minister or a Deputy Minister or a Parliamentary Secretary".
What has happened is that the illegal Government of Rhodesia paid the interest due upon the Government loan stock on November 21. On December 6, when another instalment fell due, the interest was not paid because we had made it impossible for the illegal Rhodesian Government to obtain the necessary currency to pay it to persons resident outside Rhodesia. Therefore, for the first time, there was a default upon a Commonwealth Trustee stock; and I understand that this default again took place on December 15 on the instalment which then fell due.
I really do not think it will redound to our credit or advantage if we plead
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that the de facto Government of Rhodesia is illegal in so far as it is competent for us to take away its assets, and that it is still a legal Government in so far as it still has the liability to pay the interest which we have made it impossible for it to do. I really do not see how we can argue that if we have the power—as I think we have—to deprive this illegal Government of the financial assets of the people of Rhodesia, we can go on to argue that we have the power to take away its assets but no power to take over its liabilities. Surely, if we pursue this line we shall be regarded, to say the least of it, as equivocating and disingenuous; and I think this is of fundamental importance. So far from being irrelevant to the Order, it is the most important thing about it.
In normal circumstances it would have been a sufficient reason for a vote against the Order, but as my noble friend Lord Dilhorne has said, we do not intend to divide against the Order because we feel that to follow such a course would not help our agreed common objective of bringing back Rhodesia at the earliest possible moment to constitutional Government. But surely that makes it all the more important that we should act in a manner which is clearly above reproach in the eyes of the world. As the noble Lord, Lord Byers—rightly, I think—said, our refusal to pay the interest due upon these bonds after we had deprived the illegal Government of the funds necessary to pay it and of having the constitutional power to pay, may, in itself, indirectly delay our objective of bringing back Rhodesia to constitutional Government—because the more honourable and more straightforward we are seen to be, the sooner that result is likely to be brought about.
I would ask the Government, indeed I beg the Government, to be consistent and to be straightforward in order to achieve our common objective and in order to retain our unity on this question, which is of such importance to the Commonwealth and to the world. I am sure the Government wish to be both; but there have been statements lately which have appeared to be ambiguous in some respects. The Prime Minister began by saying—and he said it very well—that the use of force was absolutely out. I do hope that that is still so, because more lately

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there have been statements made by the Prime Minister land by others which might perhaps be interpreted to mean that this may not be so. I think we all agree with and admire the Prime Minister's statement on November 23 about conciliation, in which he said that as soon as the people of Rhodesia are prepared to return to constitutional paths, and as soon as the Governor feels there is an opportunity of people there forming a Government which will act in a constitutional manner, we would want to deal with those people without any recrimination or rancour about the past. I think that was a very fine conclusion to the sentence: without any recrimination or rancour about the past. But we are not altogether certain, in view of recent statements, whether the Government still feel that recrimination and rancour are to be avoided.
I am not going to say anything about the recent ambiguities concerning those with whom we should negotiate, but the impression has been created that the Government may not perhaps wish to negotiate in any circumstances with people who have deceived them and who have acted illegally. I hope that this is not the true mind of the Government; because, if you are going to have constitutional rule in Rhodesia, clearly you must have constitutional elections; and you cannot have constitutional, free elections if the only people who are allowed to stand for election are those people whose honesty and good character have the approval of the British Government. Therefore, I hope that the Government will bear in mind that if we are to achieve our common objective, we must not rule out negotiations with any Rhodesian, however illegally he may have acted and however exasperating his behaviour may have been to all of us.
4.50 p.m.
LORD SHEPHERD: My Lords, to me this has been a strange debate, and I think I might ask for the sympathy of the House when attempting to wind it up and to deal with the various points which have been raised. We had the sad and sobering speech of the noble Lord, Lord Balfour of Inchrye. I would not agree with all he said, but I certainly share the sense of his speech, that what we are now being called on to do is as utterly repugnant to the members of my Party, my Government and their supporters, as
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it is to any noble Lord opposite. There was the speech of the noble and gallant Lord, Lord Fraser of North Cape, with all its simplicity, which struck at the very heart of the subject; that we are not, in fact, considering the evils of a people but the, perhaps, misguided actions of their leaders.
Then there was the deep and penetrating speech that we should expect to hear from the noble and learned Viscount, Lord Dilhorne—and here I may say that some of my difficulty is due to the fact that the noble and learned Viscount fired his questions so fast that, not being a shorthand writer, I am not sure that I got down all the questions, or even the right sense of them. If I do not answer all his points, it will not be because I am being evasive. If I miss any point put by the noble and learned Viscount, or by any other noble Lord, which he feels is important, perhaps he will remind me. Because I sense the concern of the House that these matters should be dealt with, I will undertake that, if I cannot deal with them adequately this evening, I will, between now and Christmas, read Hansard carefully, and if necessary I will communicate with the noble Lords concerned.
When listening to the noble Lord, Lord Colyton (who seeks the forgiveness of the House because he has had to leave early owing to the illness of his wife), I had the feeling that we were dealing with a domestic matter. But most of us, I think, are conscious that this is not a domestic matter between Mr. Wilson, as was suggested, and Mr. Smith. This is an issue between the Government of Rhodesia and the British Parliament—because the British Parliament is the only organisation which, in the end, can grant independence to the Colony of Southern Rhodesia. The action of Mr. Smith was not against the Labour Government; it was an action against the sovereign Parliament of Great Britain.
My Lords, we should never forget that in the end it will be for Parliament to decide what further steps should be taken and what conclusions should be arrived at. I think it was the noble Lord, Lord Salter, who suggested that we should move from one step to another and that finally we should be confronted with the need for military action. On November 11, 1965, we had the choice between military action or taking economic sanctions. The

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Government, I believe wisely and rightly, and with the unanimity of the whole House, decided to reject military action and take economic sanctions.
We know why we had to take economic sanctions. It was not only to bring Southern Rhodesia back into the Commonwealth and under Constitutional rule: it was, in fact, to safeguard the interests of the people of Southern Rhodesia, because unless we had retained responsibility for Southern Rhodesia in the face of world opinion, the actions and conflicts in Africa would have beggared description. My Lords, we had no alternative but to take action, and we chose economic sanctions. The noble and learned Viscount, Lord Dilhorne, said during his speech on the enabling Bill that our concern must always be about the effect of economic sanctions. They have been applied on a number of occasions, and they have failed because the nations were not prepared to implement them to the full. By itself no sanction, and particularly the Orders which we are considering this afternoon, would have the desired effect. It may be that some of the measures taken have loopholes in them, but we must consider the aggregate effort of all the sanctions which we have applied to Southern Rhodesia.
I think it was the noble Lord, Lord Colyton, who said that sanctions will bear harder on some individuals than on others. When you use economic sanctions, you are using a blunt instrument; but that is infinitely superior to using the sharp weapon of the sword. We have taken account of the views of your Lordships' House with regard to pensions. We are very sensitive about the application of these sanctions, but we feel that we must use them to achieve the desired end. As we have said on many occasions—but it is well worth repeating—the need is that Southern Rhodesia should have a constitutional Government and return to the Commonwealth.
When we are talking of purpose, I think it necessary that we should think in terms of the spirit which prevails at the end of the day. I would use the words of my right honourable friend the Prime Minister, when he was interviewed
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by the Daily Mirror, which were quoted. I believe, by the noble Lord, Lord Molson. The Prime Minister said:
"Given a return to constitutional rule, I am sure that everyone in Britain will want to see a rapid and constructive solution to the problem without recrimination.
"It was Abraham Lincoln, at the end of the American Civil War. who spoke of 'malice towards none' and 'binding up the nation's wounds'."
My right honourable friend concluded,
"That will be our attitude."
So, if there are noble Lords who have closer contacts with Southern Rhodesia than I, or others, have, perhaps they can communicate the message that we are not enemies of the people of Rhodesia; that if the Rhodesians will return, not by unconditional surrender, but if they will return to what they were, a country with a constitutional Government within the Commonwealth, their interests will at all times be safeguarded by Parliament, because in the end it is Parliament which decides what shall be the final solution for Rhodesia.
LORD BARNBY: My Lords, can it be understood that Rhodesia is not now in the Commonwealth, and that Tanzania is in the Commonwealth?
LORD SHEPHERD: My Lords, the noble Lord, Lord Barnby, knows as well as I do that when the Government of Southern Rhodesia became an illegal régime it automatically left the Commonwealth. Tanzania—and here I express the greatest regret—decided to break with us in Britain, and I can understand their feelings. They broke with us, but they did not break with the Commonwealth, because we are not the Commonwealth. The Commonwealth is all the countries who decide to remain in the Commonwealth. My Lords, may I express the hope that we shall see Tanzania hack, because we believe that the Commonwealth still has a great part to play in the pacification and the growth of Africa and the world.
May I turn now to more detailed points which have been raised in this debate? The question has been asked, whether the Government or the Secretary of State is the Government of Southern Rhodesia. Reference has been made to the Southern

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Rhodesia Constitution Order 1965, Section 4(a), of which reads:
"The executive authority of Southern Rhodesia may be exercised—
I stress the words, "may be"—
"on Her Majesty's behalf by a Secretary of State".
That does not make Her Majesty's Government the Government of Southern Rhodesia. It merely empowers the Secretary of State to take such action as may be necessary. It does not place upon Her Majesty's Government the authority of what was the Government of Southern Rhodesia.
VISCOUNT DILHORNE: My Lords, I feel that the noble Lord should also look at Section 42, which says that
"The executive authority of Southern Rhodesia is vested in Her Majesty and in the Governor."
This provision deals with the United Kingdom's exercise of the powers of government. It makes plain that the executive authority in Southern Rhodesia may be exercised on Her Majesty's behalf by a Secretary of State. The question is not to whom do we attach the label of Governor, but who has the authority to tell the Reserve Bank whether or not to pay interest. The point I was putting to the noble Lord, if I may make it clear, is that beyond any shadow of doubt the Secretary of State has power to order the Bank to pay the interest. That, I think, is confirmed by Section 4(1)(d), to which the noble Lord referred.
LORD SHEPHERD: My Lords, I think that the noble and learned Viscount is going a little further than I have reached in this matter. I was trying to deal with the claim that Her Majesty's Government are the Government of Rhodesia.
THE EARL OF DUNDEE: We did not say that.
LORD SHEPHERD: I understood that some noble Lords had. The noble and learned Viscount asked what was the justification for the Government suspending the old board and appointing a new one. It was clear to the Government that the old board were obeying the orders of Mr. Smith between November 11 and December 3, 1965, and up to this day, even though Mr. Smith has been suspended, the old board have continued to work with him. This was one of the
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reasons why the Government decided to suspend the old board.
The noble and learned Viscount also asked about the powers of the Secretary of State, which he described as "unfettered". In relation to the 1964 Act, which set up the Reserve Bank of Rhodesia—
VISCOUNT DILHORNE: My Lords, with great respect, we were talking about the paragraph in the Order which gave the Secretary of State unfettered and unlimited powers.
LORD SHEPHERD: My Lords, that is what I am dealing with. We have to consider the Act of 1964. As I understand it—and I have sought very close advice upon this—the Secretary of State has no special powers, other than those which are in the Order, to amend the constitution of the Bank laid down in the 1964 Act, and if he were to make an instruction which departed in any way from the provisions of the 1964 Act, a further Order in Council would have to be made. The Secretary of State has not unfettered power.
The noble and learned Viscount asked what sort of directions the Secretary of State is likely to make. At this stage, most of these would be confidential, but one of them might well be for the transfer of the assets of the Bank from one centre to another in the interests of the shareholders and customers of the Bank. As I understand it, he would not have power to prevent cheques being paid. The board, like that of any commercial organisation, is responsible for the proper conduct of business activities between one customer and other.
LORD BARNBY: My Lords, dealing with the powers of the board, Section 6 of the Bank constitution says:
"No person shall be appointed as a director if he is a director or shareholder of any bank or accepting or discount house".
Is it to be understood that the old board are suspended, and not dismissed, and that the new members appointed can be appointed only under these same personal considerations as the original directors?
LORD SHEPHERD: My Lords, the noble Lord is right in saying that the old board have been suspended and not

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dismissed. In regard to their qualifications, the noble Lord will see that these have been waived in making the appointment of the present board.
The noble and learned Viscount, Lord Dilhorne, asked why, in the Assets Order, we ask for information regarding net balances. It is true that under present Orders we should know about transfers from one account to another, but in order that we should understand the significance of these movements, we now need to know the balances. As my noble friend Lord Beswick said, in introducing these Orders, all information in regard to the accounts of private individuals would be treated as secret matter.
May I now turn to a matter which has given concern to most noble Lords who have spoken—that is, the position in regard to payments on bonds. There has been a considerable misunderstanding in the minds of many noble Lords. In regard to general loans raised by Southern Rhodesia (I am not talking about loans raised for the Kariba Dam and for special purposes), all these have been raised by the Colony of Rhodesia under a lawful Constitution consisting of a Government and Parliament. The liability for the repayment and the servicing of these loans remains with Southern Rhodesia.
All these loans were credited to the Consolidated Revenue Fund. Section 113(1) of the Constitution clearly lays down that all sums that are raised by the Colony of Rhodesia shall be paid into the Consolidated Revenue Fund and not into the Reserve Bank of Rhodesia. It is clear that interest payments and repayments are made from the annual Rhodesian Estimates, which have to be approved by Parliament and by a warrant of the Governor. The authority for paying any interest on loans raised by Southern Rhodesia rests with the Southern Rhodesian Parliament and the executive of the Colony—namely, the Governor. The revenue for the payment of interest arises from the taxes raised by the Southern Rhodesian Government, and all these sums for the present year are now available in the Rhodesian Treasury.
I believe there have been some suggestions that the reason for the latest default
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in payment on the Rhodesian stock was the measures taken in regard to the Bank. I think your Lordships should know of the sequence of events. On December 1 we announced further economic and financial measures. These undoubtedly began to bite. December 6 was the day on which the warrants should have been issued and paid. As I understand it, the Bank of England were expecting to receive instructions from Southern Rhodesia between December 1 and December 3. I think this should be borne in mind, in view of the fact that the particular Bank Order was not published until the evening of the 3rd. As I understand it, the payments that were due had been collected and provided for by the Rhodesian Estimates in the earlier part of the year, and there would have been an automatic instruction to the Bank to pay to the Bank of England. But, as I understand it, on a certain date between the 1st and 3rd the usual mechanism of the payment of interest was interrupted. Who it was, and for what purpose, I do not know. I think it should be clear that it was Mr. Smith or one of his colleagues who interfered with the general mechanism of the payment of interest on these stocks.
LORD COLERAINE: My Lords, I wonder whether the noble Lord would answer a question that rather puzzles me. I see the general validity of the argument he has just put forward, but I cannot see its validity in these particular circumstances. I would ask him this hypothetical question. Suppose Mr. Smith's Government had met these obligations and had paid this interest, and suppose Her Majesty's Government had been asked for their attitude towards this transaction, would not Her Majesty's Government have been obliged to say that it was an illegal action on the part of Mr. Smith's Government, because nothing that Mr. Smith's Government does has any legal validity? If that is so—and I do not see how you can avoid it—where does the legal obligation rest now? It cannot be with Mr. Smith.
LORD SHEPHERD: The noble Lord has raised an interesting point. The fact is that the Rhodesian Estimates had been passed by the Parliament of Southern Rhodesia prior to U.D.I.
LORD COLERAINE: The debts were in December.
LORD SHEPHERD: Let me finish. The provisions had been made, and therefore that would have been a lawful payment.
LORD COLERAINE: Before U.D.I.
LORD SHEPHERD: No. The monies authorised had been authorised by the Parliament of Southern Rhodesia prior to U.D.I., and in that sense it would be lawful. Therefore, if the payment had been made by the Reserve Bank of Rhodesia, acting as agents for the Rhodesian Government, to the Bank of England, there would have been no difficulty in meeting the interest that had arisen on the bonds.
LORD COLERAINE: In the view of the British Government they could not have acted as agents for the Rhodesian Government, because by December 6 Mr. Smith's Government had ceased to exist and, therefore, could have no legal obligation by December 6. Where did that obligation lay?
LORD SHEPHERD: I do not appear to have made myself clear to the noble Lord. What, I said was that the collection of taxes to meet the interest due on the stocks was authorised by the Parliament that was then sitting, prior to U.D.I., and, therefore, the sum that could have been made available would have arisen from a lawful act of the Rhodesian Parliament and there would be no question of any illegality in the transfer of that sum to London. It may well be that Mr. Smith's Government is an illegal Government, but, as I understand it—and it is a strange thing—if an instruction was given within the 1964 Constitution and it was lawful then it could be transacted. I want to make it clear that the halt in the payment of the interest on the shares of Southern Rhodesia was no part of, and did not stem from, the decision of the Government to take control of the Reserve Banc of Southern Rhodesia.
THE EARL OF DUNDEE: My Lords, there is one point I should like to raise, quite apart from the question of illegality. I know that the Rhodesian Parliament can collect enough revenue to pay interest to its residents in Rhodesia. But can the noble Lord confirm what I take him to mean, that the illegal Government of Rhodesia possesses enough British currency in the Bank of England which it
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could have used to make these interest payments on December 6 and 15, and could it have done that, in spite of the fact that we had impounded their reserves in the Reserve Bank? Had they enough in the Bank of England to do that?
LORD SHEPHERD: I think I should need notice of that particular technical point
THE EARL. OF DUNDEE: It is not a technical point. Surely it is fundamental.
LORD SHEPHERD: It is a technical point (if the noble Earl will only allow me to finish) as to whether the sums were available in London. But this I can say to the noble Earl: that if instructions had been given by the agent of Southern Rhodesia—namely, the Reserve Bank—to the Bank of England, there was no reason at all why the sums should not have been paid to the holders of the stocks in question.
VISCOUNT DILHORNE: My Lords, I understand that, but it really comes back to the question I put to the noble Lord, and which I do not think has been clearly answered yet. Who was the person who at that time could have given instructions to the Reserve Bank, as agent, to pass on to the Bank of England? The answer surely is the Secretary of State.
LORD SHEPHERD: The noble and learned Viscount is rather naughty. He puts a question and then gives me the answer, and it is the wrong answer.
VISCOUNT DILHORNE: Then let us have the right one.
LORD SHEPHERD: This is one of the most difficult debates in which to answer. I do not mind taking questions, but I strongly object to having a question put and an answer given. We will not get angry at this season of good cheer.
VISCOUNT DILHORNE: What is the answer?
LORD SHEPHERD: Let me come to it. This is a serious matter. We are not in a sort of teach-in. Having made that clear, I think I ought to come back to the relationship of Her Maesty's Government with Southern Rhodesia. It is not my usual practice, but I should like to read this to your Lordships. The

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Government of Southern Rhodesia continues to exist as a separate entity, despite the rebellion that has taken place there. It remains governed by its own Constitution, and it continues to operate (so far as the physical circumstances of the rebellion permit) through its own institutions and offices, headed by the Governor. It is still regulated by, and it is still its duty to administer, its own laws (which are interpreted and enforced by its own courts), and it is still entitled and subject to the legal rights and liabilities which it has previously acquired or accepted in its own right or which it may in the future so acquire or accept. It has not in any sense been merged into the Government of the United Kingdom. Though the Government of the United Kingdom have been given certain powers to enable them to ensure the lawful government of Southern Rhodesia, including the power to make laws and, in certain cases, to exercise or control the exercise of executive powers in Southern Rhodesia, they have not assumed the government of that country, and have not in any way succeeded to either the assets or the liabilities of the Government of Southern Rhodesia. I hope I have dealt—I have done so to the best of my ability—with the question of bonds and loans.
LORD BYERS: My Lords, before the noble Lord leaves that point, may I ask him one question? From what he states, it sounds very much as though the Government could have given instructions to the Reserve Bank to pay the interest. Should we be right in assuming that?
THE EARL. OF DUNDEE: The noble Lord said that the Bank of England was expecting to be told between December 1 and December 3 to make this interest payment. What the noble Lord has not told us is how the Bank of England obtained the necessary currency to do that.
LORD SHEPHERD: To deal with the point made by the noble Lord, Lord Byers, may I say this to him? The Governor is the executive power within the Constitution. My noble and learned friend on the Woolsack will correct me if I am wrong. The Constitution of Southern Rhodesia consists of the executive authority and the Rhodesian Parliament—and
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the Rhodesian Parliament is still in being; it has not been suspended. It is only the Ministers, Mr. Smith and his colleagues, who have been suspended. On the question as to whether the Rhodesian Bank should have paid, I tried to say earlier on that the Government are not the Government of Southern Rhodesia and, therefore, could not have given an instruction to the Reserve Bank of Rhodesia to make these payments.
VISCOUNT DILHORNE: My Lords, would the noble Lord be good enough to give way once more? I know it is very difficult for him. I listened with the greatest interest to the passage he read—and he was reading very carefully—when he said in terms that it is quite right that the Secretary of State can discharge the executive functions of a Minister of the Southern Rhodesian Government. I heard him say that distinctly. It is not a question of who succeeded to the assets or the liabilities. I have not suggested for one moment that the British Government succeeded to the assets or the liabilities. I put the question, which the noble Lord has not yet answered, though I suggest it is the vital question: who, after the making of the Southern Rhodesian Constitution Order, had authority, on behalf of the Government of Southern Rhodesia, to tell the Reserve Bank to tell the Bank of England to pay the interest?
LORD SHEPHERD: I will try to deal with this point. The Reserve Bank of Rhodesia is like any other bank it takes instructions from its customers. One of the customers of the Reserve Bank is the Government of Rhodesia. The fact that Her Majesty's Government have taken certain powers does not make it the Government of Rhodesia; it does not make it a customer of the Reserve Bank. The noble Viscount shakes his head, but I have taken the best advice that I can, and if my noble and learned friend on the Woolsack disagrees with what I have said, I will seek his assistance. But that is the advice I have received.
VISCOUNT DILHORNE: I was not challenging the advice in that respect. But when the Government of Rhodesia is the customer of the Reserve Bank, some member of that Government, from time to time, would give instructions, on behalf of that Government, to the bank. Now that power has been taken for the

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Secretary of State to discharge any functions of any Minister, including the Parlimentary Secretary, the question is: Has the Secretary of State power to give instructions on behalf of the Government of Southern Rhodesia which a Minister of that Government would have?
LORD SHEPHERD: I think I said earlier—and if I did not. I am sorry—that Her Majesty's Government do not have the power to instruct the Reserve Bank of Rhodesia to make these payments, for the very reason that I have given. Noble Lords may shake their heads, but I have taken the best advice available, and I am giving it.
LORD DERWENT: My Lords, may I interrupt the noble Lord, as I have not done so before? I have tried to understand this. Could the noble Lord say what individual, Secretary of State or Minister had the power to authorise payment to the Bank of England by the Reserve Bank? That question has not yet been answered.
LORD SHEPHERD: If the noble Lord will read what I said earlier, he will see that I have already explained that situation—that is, if he was referring to the past interest and dividends that were made prior to, or shortly after, U.D.I. Have I the attention of the noble Lord? Is that the point he is after?
LORD DERWENT: I understood the noble Lord to say that the collection of the money had been authorised perfectly legally. He has not said that at a particular date it had been authorised to be paid to the Bank of England. There is a period of several months between the two.
LORD BARNBY: Before the noble Lord replies, may I read from column 1207 of Hansard, when the Chief Secretary of the Treasury replied:
"… we, the British Government, own the assets or funds of the Reserve Bank of Rhodesia."—[OFFICIAL REPORT (Commons) Vol. 722, No. 26, col. 1207; 14/12/65.]
If they have the power, as the noble Lord explained, of direction, and they own the funds, could he confirm that those funds are owned by the British Government? What about the liabilities? Do the Bank own the liabilities, too?
THE EARL OF LONGFORD: My Lords, I would venture to appeal to the House to let the noble Lord continue with his speech. I do not think the oldest Member will recall a speech which was interrupted quite so often.
LORD SHEPHERD: In view of the help that I have had from the Leader of the House, I cannot very well "knock" the noble Lord, Lord Derwent. But I would ask that he should read my speech, because I think there was some misunderstanding. I was referring to the interest paid on the loans shortly after U.D.I. We are now talking about the default of some later stuff, which raises quite a different matter. If the noble Lord, Lord Derwent, reads what I have said, I think he will see that I have dealt with this matter satisfactorily.
May I now move on? The noble Lord, Lord Byers, asked how the board was operating. The board is operating like any board but, of course, under considerable difficulties. Technically, it has control of all the assets of the Bank. We are sending messages to the chief cashier and the senior officers of the Rhodesian Bank in Salisbury, and we have no reason to believe that the officers of the Bank have acted in any way beyond the constitution of the Bank. Naturally, we are watching with considerable interest.
In regard to how effective the measures are, as I said earlier, you cannot judge one measure by itself; you need to take them all. Certainly the noble Lord will appreciate that Mr. Smith has become a good deal more angry than he was in the past, and I have no doubt that these matters are biting. The officials in Salisbury carry out the normal banking operations of the Bank as they did in the past. I think there was also a question from the noble Lord, Lord Byers, as to whether Sir Sydney Caine's board is locating the assets. This takes some time, and considerable strides have been taken; but it is one of those operations you will never know all about until you can open the full books. But the board is very active indeed. In view of what the noble Lord, Lord Colyton, said, I think I should make it clear (because I think he more or less referred to the assets of Southern Rhodesia as those of the white Rhodesians) that the assets are of the people of Rhodesia as a whole. They

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are contributed in various ways. Certainly the natives of the country have contributed by their labour, and they have a share in those assets.
My Lords, I think it was the noble Lord, Lord Colyton, who asked who is the owner of the Reserve Bank. If any noble Lord will look up the constitution of the Bank of 1964 he will see that the share capital of £1 million arrived out of the funds which became available with the dissolution of the Central African Federation. In other words, it was the contribution made by the old Colony of Rhodesia into the Central African Federation, and when it was dissolved it came back and became the funds of the Central Bank.
I should like to answer one question put by the noble Lord, Lord Barnby. He asked whether this action would have bad effects on sterling and confidence in British banking and insurance. This is very far from the truth. We have taken an action which is repugnant to all of us, to meet the desires and, I believe, the demand of the world, and I do not believe any action we have taken will in any way influence confidence in the British banking system, because, as my noble friend Lord Beswick said in regard to the Bank of England, they were acting within the law of the land.
The noble Lord, Lord Reay, asked, has the Reserve Bank located reserves, and can they deny these reserves to any particular individual or group of individuals. This, of course, arises from the Assets Order, but, as my noble friend Lord Beswick said, and as I reiterate, in regard to the Assets Order the inquiry is not in any way to affect the rights of private individuals, whether they are in Rhodesia or in this country. I think that would be an infringement of banking knowledge and banking secrecies. The noble Lord also asked a number of other questions, as did many other noble Lords. I will reply, if I may, by letter.
I would say one last word in regard to the speech of the noble Earl, Lord Dundee. He repeated a number of the questions which had been raised by his noble and learned friend Lord Dilhorne and he then referred to Party unity being shaky. My Lords, I do not believe that in regard to Party unity in the long-term
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aim of bringing Southern Rhodesia back to constitutional rule within the Commonwealth there is any dispute between us. One well remembers the days during the war when naturally the Opposition or members of the Government Party would question the Government as to the wisdom of one particular action or another. That is the duty of the Opposition and indeed of every Member of the House, but I would say this to the noble Lord, and I will say it to the House again, because I am sure most of us are conscious of the great passions that are now aroused in Africa and what I believe is the desire of the whole House that this matter should be dealt with without fighting in Africa: that one should make sure, when one is making speeches and questioning the decisions of the Government, that such speeches should not be couched (unless they are deliberately couched) to give comfort to Mr. Smith.
I said earlier that sanctions are longterm weapons—they take weeks, and even months—but once you let the other side know that you are in any way lacking in determination to see the end, all that you have done and all that they have suffered is at naught. I do suggest, particularly in view of the Order which will be presented to-morrow, that we keep our unity. We still reserve our rights to criticise and question, but we should never let Mr. Smith and his colleagues believe that there is any lack of determination in this House or in the British Parliament to see the return of Southern Rhodesia, with honour, to constitutional government within the Commonwealth.
VISCOUNT DILHORNE: My Lords, despite the appeal by the noble Earl the Leader of the House, I should like to ask the noble Lord what I believe is the most important question on these Orders. Although he may feel he has given a satisfactory answer I think I can say that he has not really satisfied at all those on this side of the House. I am sorry to annoy him by suggesting the answer, but I want to put the question as clearly as I can. It really divides itself into two parts. I start with the assumption that someone in authority before U.D.I.—some authority in Southern Rhodesia or some member of the Government—had to authorise the Reserve Bank to pay money to the Bank of England in order to pay the interest. Am I correct in that?
LORD SHEPHERD: Yes, the noble Viscount is correct.
VISCOUNT DILHORNE: If that is so, I should be grateful if the noble Lord could point out why it is that under the Constitution Order in Council, paragraph 4, the Secretary of State has not now power to give similar instructions to the Reserve Bank, because under paragraph 4 he has not only got power to exercise any functions vested in a Minister or Parliamentary Secretary but he also has power to exercise any function that is vested by the Constitution or any other law in force in Southern Rhodesia in any officer or authority of the Government.
What I am seeking to find out is who does the noble Lord now say, at the present time, would have the legal authority to say to the Reserve Bank, "Hand over the money to the Bank of England to pay that interest"? And why did he say that it is not the Secretary of State? I put these questions originally, and I think that they still require to be answered.
LORD SHEPHERD: My Lords, I have done my best, in a very long speech, and I will try to summarise it in a few words. The original payment was authorised by an act of the Southern Rhodesian Parliament following provision in the Estimates; and there is an automatic provision, as I understand it, that, having authorised the general payment, the Rhodesian Bank will then automatically remit to the Bank of England the sums due; but somewhere or another between the 1st and the 3rd, countermanding instructions were given.
As to the payments of the recent shares, these have been authorised by Parliament, and I believe, subject to correction, that they have been authorised by the Governor. The noble Lord is asking why Her Majesty's Government cannot instruct the Bank to make the payment. I tried to say earlier that the Bank can only take instructions from a customer. Her Majesty's Government are not the Government of Southern Rhodesia, and are not a customer of the Rhodesian Bank. I know it may sound strange, but it is for that reason that Her Majesty's Government at present have no power to make payment of the interest due. The noble Viscount may shake his head, and I will certainly seek to amplify this advice
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by letter; but this is the advice I have received and I cannot depart from it.
THE EARL OF LONGFORD: I see a noble Lord rising, but may I say this. At the end of a speech of this kind by a Minister somebody occasionally rises to mention one question, but I should have thought it was quite out of order to continue cross-examining, whether it is done by those who have taken part in the debate or not.
LORD GRIMSTON OF WESTBURY: My Lords, I am, of course, in the hands of your Lordships' House as to whether it is moved that I be no longer heard.
THE EARL OF LONGFORD: I am certainly not going to say anything remotely offensive to the noble Lord, but I think that it would be extremely unusual if a noble Lord made a speech at the end of the proceedings.
LORD GRIMSTON OF WESTBURY: This is a very unusual debate and an unusual occasion.
VISCOUNT DILHORNE: My Lords, I should like to support the noble Earl the Leader of the House. My noble friend the Leader of the Opposition is not here at the moment. I think it has not been the custom while I have been in the House for a noble Lord to speak following the winding-up speech by a Minister speaking for the Government. I know it is done sometimes in the Commons if time permits, but I have never seen it done here, and I would have thought that, on reflection, my noble friend would think it would be better, as we shall be debating Rhodesia to-morrow, to wait. I think it would be somewhat of an innovation if my noble friend now sought to follow the noble Lord, Lord Shepherd.
LORD GRIMSTON OF WESTBURY: My Lords, I should like to respond to my noble friend's appeal and I will do so, but I must first say this. Her Majesty's Government have produced a situation in which there has been a default on a colonial loan for the first time. We have asked how it can be put right and who is now responsible for the interest, but they do not answer us. I think it is a sufficiently serious question for us to continue the debate to get an answer, but if the noble and learned Viscount the

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Deputy Leader of my Party puts pressure upon me to say we should not continue the debate, I must accept it. But I must say, and I leave it to your Lordships, that this is a completely unprecedented occasion: there has been a default on a British Trustee stock owing to action by the British Government, and your Lordships cannot get the answer as to how that is to be put right.
On Question, Motion agreed to.

RESERVE BANK OF RHODESIA ORDER 1965
LORD BESWICK: My Lords, I beg to move that the Reserve Bank of Rhodesia Order 1965 be approved.
Moved, That the Reserve Bank of Rhodesia Order 1965 be approved.— (Lord Beswick.)
On Question, Motion agreed to.

COAL INDUSTRY BILL
5.43 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Stonham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 agreed to.
Clause 2:
CAPITAL RECONSTRUCTION, AND APPLICATION OF FUNDS, OF BOARD
2.—(1) All outstanding liabilities of the Board to the Minister in respect of any advances made to the Board by the Minister before 28th March. 1965, or in respect of any expenses and liabilities incurred as mentioned in section 28(1)(a) of the Act of 1946 before that date, other than liabilities in respect of interest for the period beginning with 31st December 1964 and ending with 27th March. 1965, shall be extinguished; but—
(b) the Board shall credit the sum of £415,000.000 to their reserve fund;
EARL FERRERS EARL FERRERS moved, in subsection (1)(b), to leave out "£415,000,000" and to insert "£372,000,000". The noble Earl said: After such a debate as we have
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recently had over money, I tremble to put forward an Amendment which deals with any sum of money, let alone millions of pounds. The object of this Amendment is in fact quite simple. It is modest, if not in size at least in intent, and it is simply to give the noble Lord, Lord Stonham, a chance, which I am sure he welcomes, of clarifying to the Committee an issue which has been, and is, very clouded.
Your Lordships are aware that this particular clause of the Bill, Clause 2, deals with writing off a sum of £415 million of debt of the Coal Board. What in fact it does is to transfer this debt of £415 million from the Coal Board to the taxpayer. I think it is right and just that your Lordships should be able to ask for the reason why the figure should be £415 million; and it is the answer to this question which has remained peculiarly obscure through all stages in another place, and indeed on Second Reading in this House. I thought that, as the noble Lord is always anxious to be fair and to make issues perfectly clear, he would welcome the opportunity of explaining precisely why £415 million is the figure which is chosen, because this matter does basically end up by being arithmetic.
The noble Lord, Lord Stonham, I know, disagrees with this because he said so on Second Reading; in fact he said so twice. He said:
"That is not a question which could be decided by calculation."—[OFFICIAL REPORT, Vol. 271 (No. 19), col. 666; 14/12/65.]
Later on he said:
"I emphasise that this was not arithmetic, but judgment."
With the greatest respect to the noble Lord, I do not think it is quite good enough. I do not think he can say one word, "judgment", and then off goes £415 million. I think we should consider what the Government's judgment is moved by and find out what reasons prompted their judgment to come to this figure. If it is a question of judgment, I should like the noble Lord, Lord Stonham, to put to your Lordships the facts which led the Government's judgment to consider that £415 million was right, and not £515 million or £315 million, or indeed, as my Amendment says, £372 million. What were the reasons? In dealing with this huge sum of money, your Lordships know that judgment on its

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own, although it is extraordinarily important, is not sufficient, and it must be backed up by facts.
In fact, the White Paper does do precisely this: it gives the facts. Paragraph 7 of the White Paper gives the facts and the figures, and I would suggest for one reason: to back up the figure, and rightly so, which Her Majesty's Government are suggesting Parliament should transfer from the Coal Board to the taxpayer. But the facts the White Paper gives only add up to £372 million and not £415 million, if you take into account the £15 million which the Government have decided to allow the Coal Board because it is not permitted to raise its prices until April 1 next year. In essence, what paragraph 7 says is that £140 million should be written off for 150 pits, £110 million for 100 pits, £16 million for coke ovens and £91 million for the accumulated deficit. In addition to that, £15 million, as I have explained, was the sum allowed for the Coal Board because it was not allowed to raise its prices. Those figures amount to £372 million, the figure which appears in my Amendment.
There is, of course, a discrepancy between this figure and the £415 million which appears in the Bill, and my question to the noble Lord is quite simple: Why an extra £43 million? Why do the Government wish to write off this extra £43 million? And I would say with the greatest respect to the noble Lord, Lord Stonham, that it is no use getting up and saying "judgment" and sitting down again—though even that would be one better than his honourable friend, the Parliamentary Secretary, in another place, who said it was "part of the rounding up exercise", which I think is one of the most extraordinary and unconventional arguments I have ever heard for disposing of £43 million.
I feel slightly sorry for the noble Lord, Lord Stonham, because I realise he has got a rotten brief. He somehow has to defend writing off £43 million for no specific reason. I should not care to be in his shoes. The only consolation I can give him is that it will give him an opportunity to display the skill which—I was going to gay we all know he has, but I think it would fairer to say, which none of us doubts he has, of arguing a bad case very effectively; but I hope that he
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will do so with conviction this time, because I really think that we want an explanation as to why this extra £43 million is to be written off.
Amendment moved—
Page 3, line 43, leave out ("£415.000,000") and insert ("£372,000,000").—(Earl Ferrers.)
5.50 p.m.
LORD STONHAM: I should like to say to the noble Earl, Lord Ferrers, at once how grateful I am to him for extending to me his sympathy for possessing what he alleged was a rotten brief. I would repay his sympathy by extending to him my own sympathy for the fact that he has had to move a rotten Amendment; because, although I am grateful to the noble Earl for explaining his object so clearly, I am bound to point out that it would not be achieved by his Amendment.
This is one of the difficulties in explaining and understanding the situation—and if the noble Earl will look at Clause 2, he will understand what I mean. A reduction, or indeed an increase, in the Board's debt can be effected only by subsection (1)(a) of Clause 2; whereas subsection (1)(b), which he seeks to amend, only makes provision for a consequential entry in the Board's books. Therefore, the reduction in the figure of £415 million which he proposed in line 43 of page 3 would merely leave a sum of £43 million which the Board would be free to dispose of elsewhere in its books. That is the kind of waste and profligacy which I am quite sure that the noble Earl, and indeed any of your Lordships, would frown on most severely. I would mention that if that disturbing state of affairs did prevail, we, or the Minister, would have recourse to Section 29 of the Coal Industry Nationalisation Act 1946, and it would then avert that catastrophe.
Although, on the grounds that I have just mentioned, I know that the noble Earl will agree that his Amendment could not succeed, I want to do my utmost to satisfy him on the most proper request he has put to me regarding clarification of the basis on which the figure of £415 million was decided. I say to him, "do my best", because, as he himself has said, this point was thoroughly canvassed at every stage of the Bill in another place, and I myself on Second Reading here dealt with it at some length, without

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apparently giving the answer the noble Earl required. Lord Ferrers has taken the figures from paragraph 7 of the White Paper, quite properly, because they were the only figures available to him, in arriving at a total of £372 million; and deducting that from £415 million he gets an unexplained deficit of £43 million.
I will not repeat the figures in detail because the noble Earl has given them quite correctly. But I am bound to say that, to me, the explanation given in the White Paper is a model of frankness and clarity. May I just quote it again for the noble Earl:
"… the Government think it right, in view of the extent of currently unprofitable operations, to take a cautious view of the future earning power of the Board's colliery assets, and, with the contraction in the market which is now taking place and which seems likely to continue, to allow for some further increase in the amount of unremunerative investment which should he written off."
I submit that the key phrases in the paragraph I have just read out are these: first, "the future earning power of the Board's … assets"; and, secondly, the need "to allow for some further increase in the amount of unremunerative investment" to be written off; and if your Lordships will refer to columns 666 to 668 of the Second Reading debate, you will note that I have already fully explained this.
This £43 million assumption is understandable, but nevertheless false. It arises because, as I pointed out before, although the fixing of the global figure was a matter not of arithmetic but of judgment, the noble Earl has insisted, because we have not given any specific figure for the over-valuation of colliery assets, on using only those figures in the White Paper to arrive at his total of £372 million and therefore has a gap of £43 million. I hope that the noble Lord will interrupt me whilst I am speaking if what I say is not quite clear. In fact, what the White Paper shows is that the book value of the pits in 1964 that were unable to contribute anything to their interest charges amounted to £250 million. This only indicated the approximate total of completely unremunerative colliery capital in 1964. That is the point. It was not a determination of the assets to be treated as valueless, because as we explain in paragraph 7 of
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the White Paper, some of the pits valued at £250 million which were unremunerative in 1964 may be expected to improve, while others now profitable, and therefore not included in the £250 million, will become unprofitable. There was, and there is, no certainty that the specific pits which made losses in 1964 will all be closed in the foreseeable future. Some pits which were included in this calculation may improve, while others, not included, may be expected to decline. Therefore, it is wrong to take the £250 million en bloc as an integral part of the £415 million. Is the noble Earl with me so far?
EARL FERRERS: Yes.
LORD STONHAM: Let me put it in another way. What in fact we are doing in this Bill is to write off £415 million of the Board's debt to the Exchequer; and the Board, with the Minister's consent, will write off in its books over a period assets equivalent in total to that amount as and when they become valueless. But at this moment we cannot say in every case which assets in which particular pits will become valueless.
What the Government have in mind in this cancellation of the Board's debt is to relieve the coal industry of the financial burden it could no longer support, and to provide the Board with a financial structure suited to the circumstances of the industry in the years ahead. To do this we have had to determine the amount of debt to be written off by reference to the earning capacity of the Board's assets in the future. In making this determination, the Government have had to have regard to the likely trend of the market for coal. In 1964-65 the total output of coal was 192½ million tons. And here I must repeat what I said on Second Reading, and what the noble Earl did not like; that there is no intention of arbitrarily cutting back to a target figure for future output. What we say is that, on the best estimates the Government can make, it would not be wise to count on being able to sell more than 170 to 180 million tons of coal in 1970. Understandably, this fall in anticipated demand led us to the view that reduced demand made it likely that the amount of the Board's colliery assets that would be unremunerative in the years ahead would

1009
be greater than the £250 million of assets which were completely unremunerative in 1964.
The Government also took into account the revenue prospects of the Board. Unfortunately, despite a respectable increase in productivity, the Board's revenue outlook, since the middle of 1963, has deteriorated almost continuously. The White Paper, indeed, made clear the Board's view that the benefits from the proposed capital reconstruction would not be sufficient to cover losses in the current year, and that, after some five years of price stability in the general level of coal prices, increases were necessary. The White Paper also made provision in the current year for the writing off of a deficit of up to £25 million. Since then the Board's revenue results for the first half of 1965–66, have been published showing a deficit of £44·6 million. I submit that this is further ample justification for our view that we should make allowance for some further deterioration in the earning power of the Board's colliery assets. The latest development, of which the Committee will be aware, is the reference to the National Board for Prices and Incomes. This shows that the Board now estimate that they require to raise additional revenue in the year 1966–67 of about £80 million. This bears out our contention that a cautious view ought to be taken of the future earning power of colliery assets, and it surely proves beyond doubt that the amount to be written off is reasonable.
The effect of the cancellation of debt on the Board's revenue account in 1965–66 will be to relieve it of interest charges of about £20 million and of depreciation to the extent of about £10 million. The amount of debt to be cancelled to which the noble Earl is objecting that is £43 million—would make a reduction of about £2 million a year in the benefit of the Board from relief of interest charges. The smallness of this in relation to the Board's £900 million turnover shows that the decision facing the Government was a matter of judgment rather than of arithmetic, and I hope that, in the light of facts I have quoted, particularly the further deterioration of the Board's revenue position, your Lordships will agree that our decision was right. I think it was just about right.
The noble Earl will remember the story of the firm's outing, when the employer
1010
asked the foreman what the beer was like. The foreman said "Just right". The employer was incautious enough to ask what "Just right" meant. "Well", said the foreman, "if it had been any better we wouldn't have got it, and if it had been any worse it wouldn't have been fit to drink." The position we are in here is really this: that if you were to chisel anything off this, then quite certainly it would do other than we want to do. It would make the Board's position such that they could not do what we hope they can do; that is, go ahead with a fresh start. Perhaps if it had been put any higher it could have been argued that it was not fair to the taxpayer.
Finally, I would remind the noble Earl that Section 2(3) of the Bill empowers the Minister to direct the Board to pay to him the whole or any part of any excess of the Board's revenue over their outgoings for any year. This provision was inserted in the Bill because there is inevitably some uncertainty about the future of the coal industry. The Government recognise that in the event of a fundamental change in the financial position of the industry, it would be unfair to the Exchequer and the general public, after taking on their shoulders the proposed massive cancellation of the Board's capital, if the Board were able to earn large surpluses, and, at the same time, to avoid making any adequate return to the Exchequer. The present situation does not lead us to believe that there is any early likelihood of circumstances requiring the use of this provision, but your Lordships can rest assured that this power is available to the Government and would be used if there should be a fundamental and favourable change in the financial position of the Board.
In the light of this safeguard, and in the light of the other facts that I have mentioned, and the explanation by which I have honestly tried to answer the noble Earl's question, I hope that he will feel able to withdraw his Amendment and let the Bill go forward with a fair wind.
6.6 p.m.
EARL FERRERS: My Lords, I am very grateful to the noble Lord for his answer to-day—indeed, I think he would be very worried if I were not satisfied, and if I were to press my Amendment, because I know that he is very anxious

1011
to get the Bill. Of course, I should not dream of trying to press any such figure into the Bill. I warned your Lordships that I thought the noble Lord, Lord Stonham, had a rotten brief but that he would make the best of it, and I think that on both grounds I can be considered right.
I thought the noble Lord's opening words were full of vindication of my opinion, when he began to argue on a complete technicality and said that my Amendment would not work because Clause 2 said something different. I thought he was going to rest the whole of his argument on that; and it would have been a pretty poor answer to the question. But the noble Lord did his best over this, and I am grateful. What is evident is that the Government have, in fact, used their judgment. Although they used the figures in the White Paper as a basis of argument for the first £372 million, they then used their judgment for the last £43 million.
I think that the noble Lord's simile of the gentleman with the glass of beer possibly pointed more to the truth about the figure of £400 million than he realised, when he said, "If it were any better we would not have got it". One is left with the impression that if the noble Lord's Government had asked for more than £415 million, they might well have run into trouble in another place, and therefore they set the figure as high as they thought they could get. However, I am very grateful to the noble Lord for doing his best to answer the point, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without amendment; Report received.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of December 13), Bill read 3a, and passed.

TEACHERS' SUPERANNUATION BILL
Read 3a (according to Order), and passed.

A MINISTRY OF EXTERNAL AFFAIRS
6.10 p.m.
LORD GLADWYN LORD GLADWYN rose to ask Her Majesty's Government whether they have come to the conclusion that the time has now arrived for the establishment of a single Ministry of External Affairs. The noble Lord said: My Lords, I shall be very brief, but some of your Lordships may remember that, when I introduced a Motion on this subject on April 7, 1964, I said that at approximately yearly intervals I proposed to put down either a Motion or an Unstarred Question, in order to draw your Lordships' attention to what, in my view, would become more and more a burning political necessity. In asking this Question I am therefore simply fulfilling my undertaking.
May I say at once that the last thing I want to do is to get this issue mixed up with Party politics? In April, 1964, I sat on the Cross Benches: now I am a Liberal. But I do not see that this debars me from speaking occasionally on technical matters, as I think this is, which do not involve Party politics and on which it is quite possible that even my own Party does not have a unanimous view. So I hope that your Lordships will consider what I have to say quite dispassionately and on its merits. So far as I can see, indeed, no Party issue is involved here: no Election pledges will be violated, whatever line your Lordships may take this evening. I trust, therefore, that, though the Government are no doubt obliged to have a line on what is, after all, an important matter of administrative reform, the official Opposition, at any rate, will be free to say what they like. Surely this is a matter on which the House might live up to its already great reputation as a body of impartial experts. I am all for Party politics; but everybody agrees that on some issues noble Lords should be encouraged to express individual views, and I must say that I should have thought that this was one of them.
My Lords, a year and a half ago I made the very simple point that the expert and distinguished signatories of the Plowden Report on Representational Services Overseas were unanimous—I repeat, unanimous—in holding that what they called the "unique feature of Britain's method of handling her external affairs"

1013
—namely, "one mechanism for dealing with Commonwealth affairs and another for dealing with foreign affairs"—was, as they said, "inconvenient, wasteful and at times inefficient". The most serious of these shortcomings—the shortcomings of our then existing system—was the division of the world, they thought, for representational purposes, into Commonwealth and non-Commonwealth countries, which, as they rightly said, "impeded the development and execution of a coherent foreign policy". The Report continued:
"Membership of the Commonwealth is only one of the factors which helps to shape the policy of a Commonwealth country and it is rarely the decisive one. We need a system which recognises that individual Commonwealth countries have developed regional interests and relationships of their own and cannot regard their relationship with Britain as paramount".
Nor could we ever, as Lord Plowden and his colleagues believed, work out a coherent foreign policy unless we were able to take fully into account the non-Commonwealth interest of Commonwealth countries and deal with them in their regional and world contexts.
"With two Ministries"—
and here again I am quoting the Report—
"the process of trying to hammer out a sensible world-wide policy is…a wasteful and time-consuming process. At times of crisis these shortcomings can prove disastrous. The division of responsibility is becoming an anachronism. The logic of events points to an amalgamation of the Commonwealth Relations Office and the Foreign Office."
All this, my Lords, was the unanimous —I repeat, unanimous—conclusion of the authors of the Report, including the noble Lord, Lord Henderson, and Sir Percivale Liesching, ex-Head of the C.R.O. Only one reason was advanced for not recommending an actual fusion of the two Ministries:
"To take such a fundamental step now could be misinterpreted as implying a loss of interest in the Commonwealth partnership."
No other argument of any kind was brought forward in support of a conclusion which clearly contradicted all the available evidence and, to put it bluntly, represented the triumph of emotion over reason. It was quite frankly an effort to appease an unthinking majority who had not studied the question and who instinctively felt, I imagine, that the creation of a Ministry of External Affairs meant that there would in some way be less red on the map. As I said at the
1014
time, I could understand such a decision being taken by Party politicians on the eve of an Election, but I have never felt that it was worthy of the experts who in all other respects had produced a wholly admirable Report on a matter of great administrative importance.
Now, my Lords, what is the position to-day? When we last discussed this question my suggestion that the Government should do what the Commission obviously thought was the right thing to do—or, at least, to name a date by which the amalgamated services would be followed by an amalgamated Ministry—was supported by only two noble Lords: the noble Lord, Lord Strang (whom I am very glad to see in his place), and the late Lord Killearn; and to some extent, I rather think, the noble Lord, Lord Robertson of Oakridge.
A great many of your Lordships held that I was a pretty subversive fellow. One noble Lord accused me of having written an article in The Times describing the Commonwealth as a farce—a suggestion which I said, unlike Mr. Enoch Powell, I could formally deny. I received a tremendous castigation from the noble and learned Viscount who then sat on the Woolsack—and I am sure that he has not changed his views in the interval, for, as we all know, the noble Viscount seldom does. He insinuated—quite unjustifiably, I thought—that I was out to abolish the Commonwealth, which in his view was, as he said, a "growing and developing" reality. The noble Viscount, Lord Amory, said that he had always admired my apparent ability to succeed in foreign affairs without ever really trying, which I thought, on the whole, was a rather back-handed compliment. Indeed, I almost began to doubt the rightness of my thesis, such was the tremendous weight of contrary opinion. But, my Lords, let us look for a moment at what has happened since April, 1964.
Since your Lordships last discussed the Plowden Report we have experienced intensive and prolonged armed hostilities —a virtual war—between two Commonwealth members; the collapse of a scheme for Commonwealth mediation in Vietnam; the rupture of diplomatic relations between ourselves and several other members of the Commonwealth; an apparent plot by one Commonwealth member to annex another; the virtual, if

1015
temporary, expulsion or exclusion of yet another member; and the creation of a situation within the Commonwealth which brings us, unfortunately, to the verge of racial war. I need hardly say that all these events closely concern our general foreign policy, and none of them gives any grounds for supposing there was such a thing as a Commonwealth which was a political entity.
Just think, my Lords, at the moment when we are so concerned with Rhodesia, how much less difficult a solution of this problem would have been if for the last few years it had been handled by one Minister of External Affairs and had not been confused (as I think) by largely irrelevant considerations connected with a vanished Empire and our own so-called "kith and kin". Yet we still have a system whereby there are two Ministries, with all their attendent panoply of Ministers and officials, for dealing with one aspect of our relations with other countries and one great Ministry with another.
This is an absurd and increasingly dangerous anomaly: not so much, of course, because it gives rise, as I think it must, to administrative confusion. That can no doubt be ironed out, with good will, however great the cost in general frustration and the lack of efficiency. Our Byzantine system of Interdepartmental committees and Cabinet sub-Committees groans on, like a rather elementary computer, but nevertheless grinds out pretty sensible conclusions in the end. The fusion of the two services, which was the result of the Plowden Report, is clearly a help; and, likewise, the fact that the Prime Minister himself does most of the real work in all these Commonwealth crises. The real danger is less here than in the fact that the perpetuation of the present system tends to preserve a very dangerous illusion, if not, as I think, a kind of living lie. This is that the Commonwealth, whatever its merits as a sort of multi-racial club, has any political or any considerable economic content. So long as this illusion persists, we shall never be able to get our foreign policy straight. And the very existence of a separate Secretary of State for Commonwealth Relations is one of the best ways to preserve it. I believe, incidentally, that the conception of the Commonwealth as an inter-racial club
1016
would be strengthened, and not weakened, if the Commonwealth Relations Office were abolished altogether.
A section of the Labour Party which in so many respects and so touchingly represents our great Victorian past may indeed still believe that illusion is reality; but I cannot imagine that this view is shared by the Party's younger and more intelligent members. Nor can I seriously believe that it is the dominant view in the Tory Party, now moving in its mysterious and instinctive way towards an acceptance by this country of full European responsibilities. How long, then, will it take this great and ancient country to come to terms with reality? I do not know. But when the Leader of this House gets up on the Front Bench and reads out a Statement made by the Prime Minister in another place, to the effect that, perhaps as a result of yet another Report, the Government have decided to set up one Ministry for dealing with all external affairs I shall feel that it has really done so. But not before. Always supposing, therefore, that the Government are not yet prepared to follow the dictates of reason, I again give notice of my intention to put down a similar Parliamentary Question approximately one year from now or, alternatively, to try to get a debate arranged, and to move for Papers.
6.25 p.m.
LORD CACCIA: My Lords, I do not wish to detain you for long as I have already declared my interest in this subject and have urged this theme in this House. Indeed, long before that I had given evidence to the same effect to the Plowden Committee, when it was sitting, on the representation of services abroad; and to my mind the arguments against the present system were decisively stated by Lord Plowden when he presented his Committee's Report about two years ago. None of those arguments was in any sense against the Commonwealth. And none of them sought in any way to diminish its significance or the importance we should give to relations with it. Quite the contrary, I would here declare another interest in that my mother was born in New Zealand. Far be it from me, therefore, to stand up here and say anything which would seem to imply that I wish to diminish those interests in any way.

1017
Lord Plowden only hesitated, as the noble Lord, Lord Gladwyn, reminded us, to recommend the establishment of a single Department of External Affairs at that time, at the time his Report was published. Of course, I accept William Penn's dictum that there is a time and place for everything; and it is right under our system of Government for the Executive to choose the time. I shall, therefore, restrict myself to some reflections on timing in the confident expectation that this is the only issue and that Her Majesty's Government do not have any lingering doubt about the wisdom of the long-needed change at some time.
First, has anything happened in the last two years to give weight to the arguments for delay? Surely not. The crises that have had to be dealt with have not been neatly divided into those areas which are handled by the Commonwealth Relations Office and those by the Foreign Office. Confrontation in Malaysia has necessitated, in fact, the setting-up of a joint Commonwealth Relations Office—Foreign Office Department. Even with the best will in the world and much corridor-bashing, nothing else would possibly work. In Cyprus and Rhodesia, the story is the same. Even over Kashmir the external elements, in so far as they did not involve relations with the British Government or with other Commonwealth Governments, had to be dealt with by the Foreign Office; that is to say, with regard to the United Nations, the U.S.A., Russia and China, as well as CENTO and SEATO. In a sentence, external affairs, like peace, is not now divisible.
Secondly, is this pattern likely to change? We cannot know everything about the future and we should always allow a margin for the unknown quantity. But having said this, one of the things that can be foretold with a degree of certainty is that the areas of instability and concern in the coming years are going to be Africa, Southern and South Eastern Asia, and Latin America. The impact of the population explosion alone is reason enough for this. Its trends for the next thirty-five years are already plainly foreseeable. These are the areas where we should work out a policy towards Africa, Asia and the Southern American hemisphere within a single Department; and we only handicap ourselves by dividing these areas artificially between two Departments of State. If we
1018
do it to impress ourselves or others, I am clear from my own experience that we only delude ourselves and that we fool nobody else. Beyond these shores, at least, we give the impression by such continuing acts that we have not yet learned —and seem determined not to learn—the time of day.
Imagine yourself a representative of the U.S.A. or United Nations coming to this country wishing to discuss, say, Cyprus. You arrive and announce your intent and you ask whom you should see. You have to be asked, "What aspect of Cyrus? Do you want to talk about internal affairs of Cyprus or the relations of Cyprus with the United Kingdom? In that case, please turn to the right. If, on the contrary, you wish to talk about the Cyprus problem as it affects Greece or as it affects Turkey or the United Nations, would you please turn to the left." "But", your interlocutor would say, "I want to discuss this thing in the round and I wish to discuss it on its own merits as a problem." You would have to say, "That is a splendid thing to want to do, but we in London run our affairs somewhat differently. We divide them up in order to deal with them." I assure your Lordships that any foreigner faced with this state of affairs would say to himself," Well, it looks to me a crazy way to run a railroad. I only hope that there are no collisions and no injuries".
All is well, even so, provided that we go from success to success, from triumph to triumph. But it is against human probability that any country in dealing with foreign affairs can have undiluted success. We should not expect this. So when inevitably we run into difficulties, foreigners say, "Well, we thought there was something funny about the way in which things were done. Now we are sure. Now we understand a little better why, for instance, this great country occasionally has to come forward and ask for something of the order of £1,000 million to keep afloat." The simple question is: Do we want our organisation of Government to be geared to what is and what we know to be coming, or do we want it to remain an outdated model built to deal with a world which ceased to exist twenty years ago at the end of the war?
My Lords, this Government set off to modernise Britain. This Government, like the last, properly conceives it to be

1019
the duty of Government to urge us all, in business and in unions alike, as a matter of national survival, to discard outworn lines of demarcation and to cut out waste, particularly of skilled personnel who are in short supply, and streamline our affairs. I agree. But does this not apply equally to the organisation of Government itself? Is not example the best precept?
Many of your Lordships will have read the Thurber and White classic, Why You Feel the Way you Do. In it there is a tale of a child back from summer camp where the boys were issued with pets. He arrives agog at home to tell his parents about his pet. They kept putting him off with such excuses as, "Not now"; "Not at meal times", and so on. Finally, in exasperation, this otherwise dutiful child explodes with the phrase, "What in the blank is the matter with right now?" May I, in conclusion then, and without disrespect, ask the Minister who is to reply the same question—whether he can explain to us, "What is the matter with right now?"
6.33 p.m.
THE EARL OF SELKIRK: My Lords, I hesitate to take part in a debate in which most of the noble Lords who have spoken have done so with great experience of life in the Foreign Service. In fact, this is not really a technical matter: it is an extremely simple matter. I believe that the Plowden Report has been fully implemented, or at any rate substantially implemented, except for one recommendation which, as the noble Lord, Lord Gladwyn, said, stands out as clear as crystal. It is whether the amalgamation of the Departments should he carried out now, or whether that would be misinterpreted. My Lords, it is clear that those who would misinterpret it are the people of this country and not other members of the Commonwealth at all. This is the only question which remains from this Report, which, as the noble Lord, Lord Caccia, has said, recommends this urgent administrative reform.
I looked through the debate in January, 1964, to which the noble Lord, Lord Gladwyn, referred. In that debate, two points were made. The first was that such a Ministry would indicate a loss of confidence in the future of the Commonwealth. The second was that it would be too much for one man. I believe
1020
that it would be the opposite so far as the Commonwealth is concerned; that, far from being the slightest indication of weakness, it would serve to blow away many of the cobwebs which have gathered round the Commonwealth and it would remove misconceptions which are actually weakening the Commonwealth at the present time. In the second place, as has been said, nearly all the Commonwealth countries are intensely interested in their neighbours. It is inevitable that they should be, and in many ways they are more interested in their neighbours than in this country; and it is proper that we should have one Department to look after these matters.
May I take your Lordships on a short journey round South and East Asia? I start at Saigon, in a country that is the concern of the Foreign Office; Kuala Lumpur is the concern of the Commonwealth Relations Office; Manila comes under the Foreign Office; Singapore under Commonwealth Relations; Jakarta under the Foreign Office and Canberra under Commonwealth Relations. My Lords, it is impossible to have one coordinated policy in those circumstances. It is a sheer anachronism which should be abolished as soon as possible. It is the duty of Parliament to see that the Commonwealth with which we are associated works through the easiest possible machinery, and this machinery clearly is not easy. The Commonwealth affairs are an integral part of the foreign policy with which every member of the Foreign Service should consider himself personally associated and concerned; he should not be concerned simply with foreign relations.
The other point made was that this work would be too much for one Minister. If one reads the paper, one finds that half-a-million letters and 150,000 telegrams are received at the Foreign Office every year. Clearly, that is too much for one man, and any man, I imagine, could easily kill himself at the Foreign Office as it is at present. I sincerely hope that the Secretary of State will not be overdoing things with his visits to Tokyo, Moscow, Germany, Washington, and now to South America. It is easy to do that. But I do not think it would be any more difficult if the Commonwealth Relations responsibilities were fully added, because it would make for a more coherent and

1021
convenient system of working. If another Minister were required, it would not be difficult to find one. We have had many new Ministers appointed recently, and whatever appropriate status was required would be given to him. The Minister must know what is going on in Commonwealth Relations, and it is proper that he should; but if a division is to take place and if the Department is too big or clumsy, let the division be geographical. I am not recommending that, but if anyone says that the Ministry is too much for one man, that is a far more rational and proper division.
May I emphasise that the Commonwealth would not be affronted by this policy? As long ago as 1925 Vincent Massey wrote this to Mr. Dawson of The Times:
"One essential step towards better understanding is to bring Dominion representatives into direct contact with the Foreign Office itself."
Ten years later he wrote in his diary:
"What good purpose does the Dominion Office serve? Could not its functions be better performed by a Dominion section of the Foreign Office with a Secretary of State to be known as the Secretary of State for Foreign and Dominion Affairs?"
It is for that reason that I am quite certain none of the Commonwealth countries would regard this amalgamation as in any way an affront. Indeed they would want to do what they have always wanted to do, which is to go to see the head man. Any head man can, of course, see only a limited number of people according to his time. For that reason I hope that this urgent step of modernisation may be undertaken soon. I know that the noble Lord may say that it is a little awkward and that there are a number of things happening currently which make the present not the most expedient moment at which to do it. We shall excuse the noble Lord an element of equivocation when he replies, provided that we may have a real indication that a further step is being taken in this matter, which I agree is one of urgency.
6.38 p.m.
LORD INCHYRA: My Lords, if it were not that I feel strongly on the subject, I should prefer not to take part in this debate. It is rather embarrassing that nearly all the speakers so far have been connected in one way or another with
1022
the Foreign Office, and it rather gives the impression that some intrigue or plot is afoot for a takeover bid by the Foreign Office of the C.R.O. That is not the case. All that I am concerned with, as I am sure all my former colleagues are, is the efficiency of the governmental machine at Whitehall.
At the moment, the machinery for dealing with overseas affairs is quite intolerable. As the noble Lord, Lord Caccia, said, it is plumb crazy. At the end of my career, I had five years in the middle of that machine. It was bad enough then, and I have no reason to suppose that it is not worse now. It was quite hopeless, when one tried to deal with questions like Cyprus or South-East Asia or the Congo, to have two Departments dealing with different aspects of the same problem. I imagine that it is even worse now with regard to Rhodesia and Malaysia.
I have no doubt at all that something must be done to put this situation right before much longer. It is not only inefficient and time-wasting, but also calculated to arouse serious misunderstandings between the two Departments primarily concerned—I am glad to say that friction between them hardly ever occurs— and also with other Government Departments in Whitehall, who never quite understand why it is that two Departments should be dealing with virtually the same problem. And, as the noble Lord, Lord Caccia, said, foreigners are absolutely defeated by the whole business.
As various noble Lords have said, the noble Lord, Lord Plowden and his Committee, of which I had the privilege of being a member, said definitely that in their opinion amalgamation of the Foreign Office and the Commonwealth Relations Office should be the ultimate aim. They went on to say that they hesitated to recommend that this step should be taken forthwith. The reason for that was not altogether, as the noble Lord, Lord Gladwyn, suggested, appeasement. It was really that the Committee felt that, if they were to make such radical recommendations which would entail structural alterations of the Government, this proposal would inevitably cause a good deal of controversy, entail prolonged debates in Parliament and elsewhere, and would distract attention and

1023
hold up the implementation of the Committee's other recommendations dealing with the more practical aspects of the future of the Diplomatic Service.
These recommendations, the Committee felt, were really of the very first importance if the new Diplomatic Service were to be in a position to fulfil the increased and more complicated duties which the Committee foresaw they would have to undertake in the coining years. We were very concerned that these practical recommendations of ours, about conditions of service, recruitment, training and so forth, should be implemented with the minimum delay, otherwise we faced the possibility of the Diplomatic Services of the Foreign Office and the Commonwealth Relations Service, as they then were, running into the sand. Therefore, we attached great importance to ensuring that these recommendations got the best possible wind from the Government and public opinion when our Report was presented. That, I think, was really the main reason why we thought it would be a mistake to complicate matters' by recommending the immediate amalgamation of the two Government Departments.
The second consideration—and one which certainly I had very much in mind —was that the Committee felt that if and when a single combined Department of External Affairs was set up, it would have a better chance of making a good start, and the transitional period would be likely to be smoother, if the officers who were to serve in that Department—that is to say, the members of the existing Foreign Service and Commonwealth Relations Service—were by that time to be members of a combined service. We thought that the first step was to amalgamate the two services and subsequently come on to the amalgamation of the two Ministries.
My own feeling is that expressed by the noble Lord, Lord Gladwyn that—times have changed. This recommendation was made about two and a half years ago. Circumstances have altered since then. First of all, the Foreign and Commonwealth Services have been amalgamated, and to the best of my information that process is going ahead very satisfactorily and perhaps more smoothly than even the most optimistic expected. Furthermore,
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the other recommendations about terms of service, pensions and so on, to which I referred, have been accepted in principle by Her Majesty's Government and are, I hope—or most of them, at all events—now in process of implementation. So, from both those points of view, there is no reason why amalgamation of the two Ministries should be any longer deferred.
I suppose that the considerations which now have to be taken into account are, first of all, the attitude of public opinion in this country, and then, the probable attitude of the Governments of the Commonwealth countries, or at least of such of those Governments as still attach importance to their relations with this country. As regard public opinion at home, I would not venture to express any opinion, but I should have thought that informed opinion was more and more coming to realise that all major questions affecting relations between this country and the Commonwealth countries were really the great questions of foreign policy, not affecting only Commonwealth countries, but affecting the world at large. It is really quite illogical to continue a system which divides these things into two watertight compartments.
As regards the attitude of the Commonwealth Governments, I would venture to share entirely the view of the noble Earl, Lord Selkirk, who said that they would welcome a change. I could quote a few examples to support that statement. I can say that even five years ago, when I was in the Foreign Office, it was common for some of the Commonwealth High Commissions in London, when they wanted information about the attitude of Her Majesty's Government towards an issue of particular interest to their Government, to come direct to the Foreign Office. Very often they would come to me and say, "What instructions are you going to send your man at the United Nations about this point?" or, "How do you look at this problem which is likely to arise in NATO next week?" They wanted to get information from the source, from the man who drafted the instructions. They did not want to get a hashed-up version at second hand from some other Government Department. They wanted to discuss matters in detail and to ask such questions as, "Why put in that paragraph?" and, "What is the meaning of that sentence?" They did not

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want someone to say, "Oh, well, the Foreign Office drafted that. We do not quite know—perhaps you are right." No doubt that system still goes on. If that is so, I feel sure that the Commonwealth Governments would welcome the changeover to a single Department.
The second point I would make is this. When on a tour as a member of the Plowden Committee, to look at our missions in some foreign countries, I remember asking a distinguished Commonwealth Ambassador, who had previously spent several years in London, what he thought about our ideas for reforming the Diplomatic and Commonwealth Relations Services. Immediately, without any hesitation, he said, "But, my dear chap, you are going the wrong way about it. You have got the wrong end of the stick. You are putting the cart before the horse. For goodness' sake, begin at the other end and set up one Department for External Affairs in London, and then you will solve the whole problem." I feel sure that that attitude will be shared by a great number of officials in Commonwealth Governments.
I know that it is frequently said that if we had one Department of External Affairs, Commonwealth Governments would somehow lose the special treatment which they get and the special relations which they now enjoy through the existence of the Commonwealth Relations Office. I do not think that that suggestion really holds water. After all, the Foreign Office do not treat all foreign Governments on a level. We have special arrangements for our NATO allies. We talk in rather different ways to our EFTA friends and some others. We do not equate the United States with China. If the Commonwealth Governments had to deal with one Department of External Affairs, there is no earthly reason why they could not enjoy just the same preferential treatment and good terms as they do now.
Then, again, I think it has been said that one of the privileges which the Commonwealth Governments enjoy at the moment, and which they might lose, is that of their Prime Ministers being able on occasion to communicate directly with our own Prime Minister. But I see no reason why the substitution of a Ministry of External Affairs for the Commonwealth Relations Office should have any effect on that. It is not abnormal at the present time, or it used not to be in my day, for
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our Prime Minister to receive messages direct from other Heads of Government.
Again, we are told—I remember hearing this argument several times—that the Commonwealth Governments would be most unhappy if they no longer felt that they had a special Minister sitting in the Cabinet, and in a position in the Cabinet to advance, if necessary, not the Commonwealth point of view, but Commonwealth considerations. That may be quite a good point. But it should surely not be impossible in a Department of External Affairs, where the Secretary of State would certainly have to have several Ministers to help him in his day-to-day work, for one of those Ministers to be given, if it were thought desirable, Cabinet rank. We had the same sort of system under the late Government, when the present Leader of the Opposition was Lord Privy Seal and sat in the Cabinet and was in a position, when the case called for it, to explain particular points on the European questions with which he was dealing. I should have thought that it would be quite simple to have some similar arrangement for a Minister to sit in the Cabinet and, so to speak, be responsible for advancing particular considerations affecting the Commonwealth.
My own view is that really the time for change has come. Apart from the question of timing and not making a change when both Departments are overloaded with work, and possibly also paying some attention to the future of the Colonial Office, my only doubt about making an immediate change is whether it would or would not be wiser to allow the amalgamated Diplomatic Service—that is to say, the amalgamation of the former Foreign Service and Commonwealth Relations Service—a little longer in which to settle down. That is a point on which I would not press to know the answer. But, subject to that, I would certainly endorse the proposal which has been made, that the sooner the Government can fix a definite target date when the two Departments should be combined, the better: and not only the better for the machine in Whitehall, but, I think, the better for our relations with foreign Governments and with Commonwealth Governments.
6.54 p.m.
LORD SHERFIELD: My Lords, I am moved to join the queue of former Permanent Under-Secretaries and Deputy

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Under-Secretaries of State and to intervene in this debate, partly because I have in the past been involved in two attempts under two Secretaries of State to bring about the amalgamation of the Commonwealth Relations and Foreign Services into one External Affairs Service. The first attempt was under Mr. Bevin. The second attempt was under Sir Anthony Eden, as he then was. So I have an impeccable bipartisan experience of this subject. These attempts failed for reasons with which I will not weary your Lordships. The circumstances were not propitious, though I still do not think that the attempts were premature.
However, the arguments for amalgamation finally prevailed in the Plowden Committee Report, and having, if I may say so, made a faultless round of the course, they blundered into the last fence for reasons which have not been very clearly explained. As the noble Lord, Lord Inchyra, has suggested, this probably did not flatter too much during the period in which the amalgamation of the two Services in the field and the streamlining of administrative arrangements at the centre were being undertaken. But now this process is, I imagine, almost complete, and there appears to be no reason, either in practice or in logic, why the amalgamation of the two Offices need be further postponed.
I do not see why a single Office should not be so organised as not to put an additional burden on the Secretary of State. I know that policy is made in Cabinets, and that its threads are in the hands of the Prime Minister. But, however closely the working arrangements are between the Departments, some polarisation is inevitable when there are two Ministers of equal status operating in the same field: because it has become the same field. There are two Permanent Secretaries of State, two Accounting Officers and two channels up which the files flow. So that on grounds of policy-making, financial control, and administrative practice the arguments are in favour of amalgamation.
There remains the one reason given by the Plowden Committee—namely, the possibility of misinterpretation of the action as showing a loss of interest in the Commonwealth partnership. Noble Lords who have preceded me have given many
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reasons why this argument has very much lost its force. I would add just one more: that if there is any misunderstanding of this kind in Commonwealth countries, then the recent formation of a Commonwealth Secretariat should reassure them that they have a channel in London through which their views can be represented. I think that in every other Commonwealth country there is a single Ministry for External Affairs. If the reason given is that it is necessary to keep the two Departments because amalgamation might lead to misunderstanding in this country, then I agree with the noble Lord, Lord Gladwyn, and other noble Lords who have said that it would be a pity to perpetuate what in fact is an illusion in the present circumstances.
I could dilate a good deal further on all these points, but fortunately the case was put for me in a nutshell by the Secretary of State for Foreign Affairs yesterday, when he gave as a reason for speaking on the Rhodesian issue in the Foreign Affairs debate in another place the fact that this was much more than a question between the United Kingdom and Rhodesia. It was a question, he said, on the solution of which would turn the vital matter of relations between the different sections of mankind in the future. I can give no better ground for ending the existing dichotomy in the field of external affairs between two Secretaries of State.
6.59 p.m.
LORD HANKEY: My Lords, I apologise for intervening so late in this debate, but I should like to add one or two points to the strong arguments which have already been raised. I believe, as has been urged, that some such measure as this is necessary for the most efficient conduct both of our foreign affairs and of our Commonwealth relations. Personally, I am a European, and I think that the United Kingdom ought somehow to enter the Common Market, with its associates. On the other hand, I believe that it is essential not to lose sight of realities.
For some reason the Commonwealth does not seem to be very fashionable in some quarters at present. But the fact remains that it contains 25 per cent. of humanity, about 730 million people, almost all self-governing and independent.

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It does 25 per cent. of world trade, and I believe that it is still of great importance to this country. We do about 35 per cent. of our trade with the Commonwealth. We live by trade, and I do not believe that we can afford to prejudice that important section of our economy. It is true that that trade has not been growing, but that is our own fault, because our economy has been so extremely soggy. If we had put our economy in order years ago, as in my opinion we should have done, then I believe that our trade with the Commonwealth would not have been soggy either, and that we should have proved a more attractive market to members of the Commonwealth who would not feel it necessary to deal so extensively with other markets.
I believe that this situation could still be put right, but in any case I think it is essential that our Commonwealth relations should be taken into account perhaps in a greater degree than was the case last time, when we again begin negotiations one day for entering the Common Market. For that purpose, it is desirable that there should be a well-unified consideration of both Commonwealth and foreign affairs. Therefore, in spite of all the difficulties in the Commonwealth, it is extremely important, in my view, that we preserve it as much as we can.
One of the features of the period into which we are entering is going to be the difficulties and the developments in the relations between the developed countries and the underdeveloped countries. The Commonwealth represents in many ways a remarkable mechanism, or a system—it is more of a system—for contacts between the developed and the underdeveloped countries, because the Commonwealth includes a number of highly developed countries and a large number of underdeveloped ones, and a very large population in some of them. I believe that that system of contacts is essential to the new Europe which is undoubtedly going to come about. I believe that Europe without such a system of relations with the outside world would be a rather futile area, and that the system which has been developed in Brussels is of great interest to anybody interested in Commonwealth relations. But this is just a way of saying that these things ought to be considered together, and I entirely agree with what the noble Lord,
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Lord Sherfield, said: that the formation of the Commonwealth Secretariat in London is of particular importance in that connection.
In my view, it is very important that, whatever system we arrange when this is done—and I am sure that it will be done —we should not overload the Foreign Secretary. I have been Private Secretary in the past to a very well known Foreign Secretary, and I must say on behalf of the Foreign Service that we very nearly killed him. So it was with other Foreign Secretaries with whom I have been closely associated.
If the Foreign Secretary had to go around Africa and other parts of the Commonwealth, and not only sort out the futile and absurd difficulties which occur in some of these areas, as well as the futile and absurd difficulties which occur in the United Nations, not at all in the Commonwealth connection, but including Commonwealth countries, I think that we should prejudice the health of our Foreign Secretaries to an unreasonable degree. Therefore, I am sure that, if we made this change, a system would be necessary whereby there would have to be an extra Minister in the Foreign Office. Perhaps he ought to attend the Cabinet—but that may be looking too far ahead. I only want to say that, in supporting this proposal, I do not want it to be thought that I have not thought of the difficulties.
7.5 p.m.
LORD WALSTON: My Lords, this has been a remarkable debate, for two reasons. One is, I think, that even in your Lordships' House, with all the men of distinction who customarily speak here, it is rare to find in one short debate two Permanent Under-Secretaries of the Foreign Office, one Joint Permanent Secretary of the Treasury, one Commissioner General for South-East Asia, two Ambassadors to Washington, one Ambassador to France and one Ambassador to Bonn—positions formerly held among many other distinguished positions—taking part in this debate. No wonder the standard of the debate has been high!
It is also, to my mind, rather peculiar in that one generally expects the champions of change to be the politicians without a full knowledge of all the difficulties, while those who counsel caution

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are the permanent officials who know all the problems that any change entails. Today the rôles seem to be somewhat reversed. Here we have the three Graces —if I may so call them—sitting on the Cross Benches, and others, all speaking with their mighty experience in favour of almost immediate change, whereas you find the one (if I may so describe myself) professional politician among the speakers giving the reasons why this change cannot take place immediately.
The arguments for the change I think fall roughly under two heads: first, the Commonwealth reasons, which were the burden of the speech of the noble Lord, Lord Gladwyn; and the others, which were emphasised more by later speakers, although not in any way ignored by the noble Lord, Lord Gladwyn—the reasons of efficiency. With regard to the first, I unashamedly align myself with those whom the noble Lord, Lord Gladwyn, described—members of the Labour Party who still suffer under the illusions of our great Victorian past. He felt possibly that those illusions were not shared by the younger and more intelligent members of my Party. That being so, I am afraid I cannot be either one of the younger or more intelligent members. But I would say that I do not consider myself under any illusions. I was glad that in particular the noble Lord, Lord Inchyra, also mentioned the value of the Commonwealth and its importance, in addition to the noble Lord, Lord Hankey, in his valuable last minute intervention.
I think we derive many practical advantages from the Commonwealth, albeit that it suffers from the difficulties we are seeing at the present time. We ourselves should be the losers if the Commonwealth were to disintegrate. Therefore, we must look with great care at any action which might tend to loosen the bonds of the Commonwealth.
I am somewhat open-minded in this matter of how a co-ordination of the two Offices would affect this aspect. I know perfectly well that there are many Commonwealth countries which would in no way be upset about the merger. Some of them would positively welcome it. Some of them would prefer to be regarded, in this context, at least on a par with any other foreign country, although in other respects they believe they have a special
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relationship—just as, as was pointed out, we can have special relationships with certain of our special friends among foreign countries. There are others, I know, who value the existence of the Commonwealth Relations Office and the Secretary of State for Commonwealth Relations, to whom they can speak directly and in a somewhat different way than they can speak to a Secretary of State for Foreign Affairs, or of External Relations. So that is, I believe, a reason to which we must pay a great deal of attention. It is a contra-indication to any hasty move in this matter, and the reason why any move towards the closer integration of the two Offices could be done only after close consultation with our fellow members of the Commonwealth.
When we come to the question of efficiency, I think that those who propose this move are on very much stronger around. I say quite frankly that when this subject was last debated in April, 1964, I took a very strong Commonwealth line and a very strong line opposed to any further amalgamation than that which was put forward by the Plowden Committee. Having had now something over a year working in one of the two Departments concerned, I am well aware of the need for the closest possible co-operation and co-ordination in the work of the two Departments. I have no doubt that in many ways efficiency would better be served if there were simply one Department of External Affairs, but there are many difficulties attaching to this, not the least being the one which has been mentioned with engaging frankness by the noble Lord, Lord Hankey, namely, the strain which would be put on the Secretary of State. There are ways of overcoming this. Noble Lords have suggested that there might be two Ministers of Cabinet rank, one senior and the other junior. But, for all that, there can be only one man ultimately responsible, and the wider his sphere the greater is his responsibility and therefore the greater the strain put upon him. I do not say that rules it out completely, but it is something which has to be borne in mind.
The other reasons against a hasty move, I do not say an ultimate move, are simply the practical problems of carrying out this merger. I know that from the point of view of the outsider looking at it objectively— the foreigner—as the noble

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Lord, Lord Caccia, mentioned, we seem to have a cockeyed system. I think the noble Lord, Lord Inchyra, said that foreigners must be defeated by it. Some people would say it is the job of the Foreign Office to defeat foreigners. Although it is confusing for them I think they get by all right. But I do not want to give the impression that we are resolutely turning our faces against any further progress along this line.
The Government of the day and the Opposition, as it then was, accepted and supported the Report of the Plowden Committee, and the main recommendations have now been put into force—that is, the creation of an integrated Diplomatic Service. That has been operating under one head who at the moment is at the same time the Permanent Secretary of the Commonwealth Relations Office. It has been operating since January 1, and during that time there have been 88 members of the former Foreign Service who have been posted to Commonwealth Relations Office posts and 42 members of the Commonwealth Relations Office who have been posted to Foreign Office posts. A total of 130 in less than twelve months have been cross-posted in this way, which I think is a significant achievement in a relatively short space of time. As that works out and makes itself felt increasingly, as the noble Lord, Lord Inchyra, pointed out, it will make any later, closer integration of the Offices very much more effective.
That is not the end of the unification which has taken place. There have been some relatively minor changes. There has been the unification of the communications system and of the cyphers, which has added greatly to efficiency. There has been unification of the information services in the two Offices. There are now joint resident clerks for both the Commonwealth Relations Office and the Foreign Office. All these, though they are not epoch-making or shattering in any way, are moves towards integration and towards greater efficiency.
However, there still remains the actual operational, efficient policy-making and the implementation of policy. Here, too, significant progress has been made. The noble Earl, Lord Selkirk, taking us quickly around South-East Asia (though I felt that he went on somewhat a roundabout way, when he went from Malaya
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to Manila and then back to Singapore: it might have been easier to go from Kuala Lumpur to Singapore and then across to Manila), rightly hit on the most important nonsense of the present situation: that when we have a situation such as has been going on, with confrontation between Indonesia, a foreign country, and Malaysia, a Commonwealth country, the two Departments are very closely involved.
In the present situation in Rhodesia, Rhodesia is the responsibility of the Commonwealth Relations Office, Addis Ababa, which is an O.A.U. country, and the United Nations are the responsibility of the Foreign Office, and there is clearly a very great interest to both Departments. At the highest level it is, after all, Cabinet decisions which matter, and there we have both Secretaries of State sitting in the Cabinet with their colleagues, jointly responsible for the highest policy.
At the lower levels there have been set up, and are working extremely well, both a Malaysian Committee and a Rhodesian Committee—joint Committees of officials in the Commonwealth Relations Office and the Foreign Office—in order to work out the day-to-day problems and to promote far greater cohesion and efficiency. At the junior Ministerial level, while there is no official organisation, there is very close co-operation between the junior Ministers in both of those Departments on a purely informal and day-to-day basis. This means that the apparent divisions between these two Departments are very much less than would appear to the foreigner, or even to some of our own people.
I have, in fact, a brief here from the present Permanent Under-Secretary at the Commonwealth Relations Office in which there is an indication of how well this "getting together" is now working. For, whereas in the days of (as he writes) Sir Harold Caccia, they used to exchange letters, now there is no need to do that with Lord Caccia's successor. Whether that means, as one might take it, that there is no communication whatsoever, even by letter, or, as I suspect, that in fact they are so close together there is no need for letters to pass backwards and forwards, because they will think with each other and communicate with each other in an informal way,

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this is a very good indication of the way in which progress has been made.
My Lords, I am afraid that I cannot give the noble Lord, Lord Gladwyn, an assurance that when next year comes round and it is time for him to put down his Question again there will be no need to do it because the merger will already have taken place. But I can assure him, and other noble Lords who have spoken to-day that the points they have made have been fully taken and that already, in advance of this debate, as I have attempted to show, a great deal has been done in a practical if unspectacular way to bring these two Departments closer together. Whether they will ever eventually become one, and if so when, is not for me to say; but the inefficiencies which appeared to be inevitable in this system are gradually being removed, and we are working towards an organisation in which, whether or not there are two Departments of State and two Secretaries of State, at least the co-operation between the two is such that the inefficiencies and the illogicalities have very largely disappeared.