RESERVE BANK OF RHODESIA ORDER 1967

HL Deb 20 April 1967 vol 282 cc314-23

3.22 p.m.

THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON)

My Lords, I beg to move that this Order be approved. This Order amends the Reserve Bank of Rhodesia Order 1965, which, as your Lordships will remember, was made in December, 1965, and was approved by Parliament in the same month. I do not want to waste too much of your Lordships' time but I will briefly go over the earlier history, for those whose memories may be a little hazy. The Reserve Bank of Rhodesia was established in 1964 by an Act of the Southern Rhodesia Legislature entitled the Reserve Bank of Rhodesia Act 1964. This provided for the affairs of the Bank to be run by a board of directors consisting of a governor, a deputy governor and a board of directors consisting of not less than five nor more than seven.

After the illegal declaration of independence in November, 1965, it became necessary to prevent the then board of directors of the Bank of Salisbury from continuing to exercise authority in the name of the Bank. This was especially needed because of the fairly large accounts held by the Bank outside Southern Rhodesia. Accordingly, the 1965 Order was made. Article 2 of this Order suspended from office the people who immediately before the Order came into force were the governor, the deputy governor and other directors of the Reserve Bank. Article 3 of that Order empowered the Secretary of State, so long as the Order remained in force, to appoint other persons to be the governor, deputy governor and directors of the Bank. These constituted for the time being the board of directors of the Bank.

The power vested in the Secretary of State by Article 3 of the Order was at once exercised, and a governor and other directors were appointed. The governor was, as your Lordships will recollect, Sir Sydney Caine, and the other directors were Viscount Harcourt, Lord Poole, Sir Norman Kipping, Sir Gordon Munro and Sir Siegmund Warburg. The primary function of this new board was to locate the external assets of the Reserve Bank, and, once they had located them, to assert their authority over them. This was to prevent the illegal régime from applying them towards the furtherance of the rebellion and to preserve them for the people of Rhodesia as a whole until such time as constitutional Government should be restored. This exercise has now been completed and, if I may say so, it has been carried out with great skill and energy, for which the people of Southern Rhodesia owe a great debt of gratitude to Sir Sydney Caine and to his distinguished colleagues.

Now that the board has done its main job, there is no longer the same need for a full board of directors of the Bank. What now remains to be done can be done adequately by one man, with an alternate deputising for him whenever necessary. His job in the future would be a mixture between those ordinarily exercised by the governor and other directors of a reserve bank, and those ordinarily exercised by a trustee, as there is a quite considerable element of trusteeship in this operation. So it has been decided to replace the existing offices of governor and directors of the Bank by a single office, the holder of which would be formally styled "Governor and trustee". This briefly is the explanation of the purpose and the effect of this Order.

To turn to the Order itself, Article 1 is concerned with purely formal matters. Article 2 revokes Article 3 of the Order of 1965, the original Order to which I have just referred. This revoked Article empowered the Secretary of State to appoint a governor and other directors, and regulated the functions of such people. It is replaced by a fresh Article 3, paragraph (a) of which establishes the new office of governor and trustee, and provides that the functions which are conferred on him are to be exercisable in place of the functions of the office of governor, deputy governor and the other directors, and in place of the functions of a board of directors as a whole.

Paragraph (b) deals with the appointment and tenure of office of the governor and trustee, and in no way differs materially from the equivalent provision in the Order of 1965. Paragraph (c) makes corresponding provision for the appointment of an alternate to the governor and trustee; and paragraph (d) provides for the alternate to be able to exercise the functions of the office of governor and trustee at any time. I do not think there is any need to spell out in detail the circumstances in which the alternate would act as governor and trustee. Clearly, the provision is designed for such cases as when the governor and trustee may be unable to fulfil his function, because he is ill or travelling abroad or cannot easily be reached. Paragraph (e) makes provision for the remuneration and allowances of the governor and trustee and for the alternate. This again corresponds substantially to a provision in the 1965 Order.

At this point I should like to pay tribute to the public spirit and to the high sense of duty of Sir Sydney Caine and his colleagues under the 1965 Order. They have not taken any remuneration for their great services. Paragraphs (f), (g) and (h) deal with the functions to be exercised by the governor and trustee. This Order empowers him—indeed, it declares it to be his general duty—to take all the necessary or expedient steps for the purpose of preserving and protecting the property of the Bank, wherever it may be found, and to prevent unauthorised persons from acting or purporting to act on behalf of the Bank, or disposing of its property, or from acting in any way that may be to the prejudice of the Bank's interests.

This, of course, is the function which has largely occupied the board which was appointed in 1965. The fact that they have succeeded so well makes it unlikely that the governor and trustee will have as much to do as the board did in the past, but, all the same, this will probably still remain the principal task of the governor and trustee. In addition, the governor and trustee is required to take such steps as seem to him necessary or expedient to carry on the business of the Bank or to enable it to be carried on. At the moment this is not likely to be a very heavy task, but there have been, and no doubt there will be again, occasions when it needs to be carried out, for example in connection with the Bank's dealings with other central and reserve banks. And, of course, when the time comes for a lawful Government to be restored in Rhodesia there will probably be a transitional period when this provision is of considerable importance. In short, the governor and trustee is authorised to exercise all the lawful powers of the board of directors of the Bank or of any individual director, and may, in particular, enter into any financial and similar property transactions which the directors could lawfully have entered into.

Finally, paragraph (i) repeats the provision of the Order of 1965 under which the Secretary of State can give binding directions relating to the policy of the Bank or the exercise of the powers and duties vested in the governor and trustee. The remaining provision of the present Order is Article 3, which is purely a transitional one. It provides for the person who last held office as governor under the Order of 1965, that is to say, Sir Sydney Caine, to carry on in office as the first governor and trustee without the necessity for a formal reappointment. The other directors holding office under the 1965 Order have given up their office, since the effect of the revocation and replacement of the Article under which they were appointed was to abolish the offices which they held.

I hope that this explains the purpose and the effect of this Order, but there are two further comments which I should like to add. The first is to explain that, though the desirability of making this change was realised before the end of last year and was agreed with the then board, before the change could be put into effect litigation was started in the German courts over the bank notes which the illegal régime in Rhodesia were trying to have printed and exported to Rhodesia for their use. In order to avoid confusing this litigation the change was postponed until the litigation itself had been disposed of. This is why the Order was not made until the end of last month.

The second comment which I should like to make is once again to repeat the thanks of Her Majesty's Government, and I am sure of your Lordships, to the retiring directors of the Bank—and that, of course, includes Sir Gordon Monro, who retired some time ago because of ill-health—for the very great services which they have rendered in preserving the funds held by the Bank on behalf of the people of Southern Rhodesia. When lawful government is restored these funds will be available for rebuilding and restoring the prosperity and sound financial position of Southern Rhodesia. Our thanks also go to Sir Sydney Caine himself, not only for what he has so far done as governor but also for agreeing to stay on for the time being both as governor and as trustee. The debt we owe him is a continuing one. My Lords, I beg to move.

Moved, That the Reserve Bank of Rhodesia Order 1967 be approved.—(Lord Walston.)

3.35 p.m.

LORD CARRINGTON

My Lords, this Order and the Order which the noble Lord will move very shortly, the second Order, amend in a comparatively minor way Orders which have already been passed; consequently they reflect a policy which is already well known to your Lordships and to which our attitude on this side of the House is equally well known. I must thank the noble Lord, Lord Walston, for his full explanation. But for the usual courtesies of this House, I might even have called it an over-full explanation. But what he has said has merely described the Order and it is unexceptionable, I think, in the light of Government policy.

In regard to the second Order—and here perhaps your Lordships will forgive me for anticipating, since I do not want to get up and make another speech—may I ask the noble Lord this question? It seems to me that it will be necessary, for the proper regulation of that Order, for some prior knowledge to be held on the Government's part. How are the Government going to hold that prior knowledge which will enable that Order to come into force? That is the only question I have to ask on the second Order. As I say, I think these Orders are only minor amendments to Orders which have already been passed, and I would certainly recommend noble Lords on this side of the House not to oppose them.

LORD GRIMSTON OF WESTBURY

My Lords, I am sorry to have to rise to take a slightly different line from my noble friend Lord Carrington. I should like to direct your Lordships' attention to what was said by the Minister of State for the Commonwealth Office when introducing one of these Orders in another place. He said this: This Order is an essential step to tighten up the enforcement machinery of our existing sections. It is a reminder to the people of Southern Rhodesia, both black and white, that until legality is restored there the sanctions grip will get tighter and tighter".—[OFFICIAL REPORT, Commons, 18/4/67, col. 441.]

LORD WALSTON

My Lords, may I interrupt the noble Lord for a moment, and ask him whether he is speaking to the Order which I have moved, or that which I am going to move?

LORD GRIMSTON OF WESTBURY

I was speaking to the next Order, but my noble friend Lord Carrington referred in his remarks to both Orders, and I am doing the same. In view of what the Minister in another place said, it is quite obvious that in introducing these Orders the Government have not only in mind any tidying up of previous Orders, but they want to remind the people of Southern Rhodesia of their whole policy, and in fact to give them a warning about it. In those circumstances surely we are entitled, when discussing these Orders here, to bring under review the whole policy of the Government of which these Orders are supposed to remind people. If we are not allowed to do that here, I can only say that the Minister is repudiating what his colleague said in another place. Therefore, I propose to say something about the whole policy of the Government.

THE LORD PRIVY SEAL (THE EARL OF LONGFORD)

My Lords, might I intervene? What the House considers relevant is entirely for the House to determine, but I would offer my very strong opinion—my own opinion—that the noble Lord would be quite out of order if he proceeded along the lines which he has just explained to us. I need not remind him of Standing Order No. 26 which reads: Every motion, after it has been moved, shall be proposed from the Woolsack or the Chair before debate thereon. Debate must be relevant to the question before the House, and, where more than one question has been put, the debate must be relevant to the last question so proposed until it has been disposed of. It is always a matter of opinion, as the noble Lord with his experience elsewhere knows, whether something is relevant or not, but taking for the moment the definition of the noble Lord, Lord Carrington, of this particular Order as "a minor amendment of policy", I would say that if the noble Lord is trying, as he seems to be, to start a general Rhodesia debate, he is quite out of order, and I imagine that that will be the opinion of the House. Whether it proves to be so, of course, we shall have to test, if necessary.

THE EARL OF SWINTON

My Lords, I do not at all dissent from the advice which my noble leader, Lord Carrington, has given. I think that it would be quite wrong to divide on this. But I think that the Leader of the House has raised some extremely important points in taking issue with my noble friend. I should like to put this to him. If it is out of order to have such a discussion as he was trying to initiate, why was it entirely in order in another place to have exactly the same kind of discussion? It is quite true that we cannot be called to order by the noble Lord on the Woolsack, and that we are the judges of what is in order. But it would be rather a curious situation if we in this House took the view that the sort of discussion, on exactly the same issue, that was considered wholly in order in another place, where there are the authorities to call people to order, were entirely out of order here. I should like the noble Earl to consider that point.

THE EARL OF LONGFORD

My Lords, of course, I have not in front of me—and I do not suppose most Members of the House have in front of them—details of what took place elsewhere. But I do not think the noble Earl would seriously argue that we must be governed in this House by what takes place elsewhere. I should be very much surprised if he took that line. I do not know what the noble Lord, Lord Grimston of Westbury, wishes to deal with, but assuming that he wants to launch this House this afternoon into a general Rhodesian debate—which I understand he does—on what has been described by the Leader of the Opposition (to take someone who can be regarded as objective) as a minor amendment, I submit that if anything was ever going to be out of order in this House that would be.

THE EARL OF SWINTON

My Lords, I am sorry; but we are entirely entitled to decide for ourselves what is in order here, and we are not, of course, bound by what is done in another place. On the other hand, the noble Earl is not slow to remind us, on almost every occasion, that we must not run counter to what is done in another place and that that would be very unconstitutional of us. It would seem rather strange if, when a procedure has been regarded as entirely in order in another place, we were to decide here that it is wholly out of order. It may be that that is what we shall decide to do, but it may have implications, in other debates and on other constitutional issues, which the noble Earl will not find quite so convenient.

LORD GRIMSTON OF WESTBURY

My Lords, I have too great a regard for the integrity of the noble Earl the Leader of the House to think that he is opposing my suggestion for any reason of inconvenience. But I think what he is really doing is to repudiate what his colleague has said in another place, because it was clearly said there that these Orders were designed almost as a threat to Rhodesia, and that unless she toed the line, further things would happen to her. If the Orders are introduced in that spirit, I suggest that it is very wrong to say that we cannot discuss the policy under which they are being brought in. If they are merely tidying-up Orders, that is a different matter; but that is not what was said about them in another place, and I gather that that is not what the noble Earl is saying here—or is he?

THE EARL OF LONGFORD

My Lords, I gather that the noble Lord, Lord Grimston of Westbury, now fears that the next Order, which has not yet been moved, will be moved in a certain spirit. He is not, I gather, referring to the spirit in which this Order has been moved, but he fears the spirit of the later one. As to that, of course he must make up his own mind, but I have no reason whatever to suppose that the spirit of the next Order will be different from the spirit in which this one has been moved. But I would point out—and speaking, as the noble Lord will realise, without much notice—that what happened elsewhere is not perhaps quite what the noble Earl, Lord Swinton, supposes. The noble Lord and the House will forgive me for not having made a preliminary study of this issue, as I did not know that it was going to come up in this form. But I have been handed one quotation, when the Deputy Speaker intervened and said: Order. I must remind the hon. and learned Gentleman"— that was Mr. Paget— that the scope of the debate on this Order is very limited. We are merely concerned with"— so-and-so. We cannot enter into a general discussion of sanctions."—[OFFICIAL REPORT, Commons, 18/4/67, col. 447.] So I am afraid it would be quite wrong to imply that the Speaker elsewhere did allow a general Rhodesian debate. It just was not so. So I beg the noble Lord, in the light of this, to restrict himself to the Order.

LORD HAWKE

My Lords, may I ask the Leader of the House what interpretation he puts on the Twentieth Report from the Special Orders Committee in which, in regard to the second Order, they say: That the Order raises important questions of policy."? And they go on to say: … in the opinion of the Committee the Order cannot be passed without special attention. What do they mean by "special attention"?

THE EARL OF LONGFORD

My Lords, with great respect to all noble Lords who have reached the second Order, I would point out that the Government have not yet reached it. So I do not feel called upon to interpret it at this stage. I do not want to hold up the House, but I hope that the noble Lord will try to restrict himself to the Order.

LORD GRIMSTON OF WESTBURY

My Lords, so far as this Order is concerned I have a remark to make, but it will be quite short. But I shall raise the other point again on the second Order, because I really believe that the policy should come under review.

THE EARL OF LONGFORD

My Lords, may I say that we shall see what happens when we get there.

LORD GRIMSTON OF WESTBURY

My Lords, on this particular Order which we are discussing, all I have to say is this. It seems to me that the effect of the Order is to relieve from embarrassment certain gentlemen who have been serving on the Reserve Bank set up by the original Order. One can understand their embarrassment when one of the results of the operations of this Bank has been that liabilities of Rhodesian loans which were guaranteed by Her Majesty's Government have been repudiated, and they have been repudiated through the actions of this Board—possibly, although I do not know, on the instructions of the Government.

They have held certain Rhodesian monies which would have been devoted to the service of Rhodesian loans, and there has been default on those securities. I can well imagine the feeling of any merchant bankers in the City of London involved in that sort of thing, and I can only imagine that it must be with a great sense of relief that this Order releases them from that most embarrassing position. So far as this Order is concerned, I think your Lordships might well pass it, because it might do something to restore the credit of the City of London.

On Question, Motion agreed to.