§ 3.58 p.m.
§ LORD BESWICK
My Lords, with permission I should like to repeat a Statement on Malta made by my right honourable friend the Secretary of State for Commonwealth Relations. He said:
"I wish to make a Statement on my recent visit to Malta in connection with the proposed reductions of our forces there.
"It was stated in last year's Defence White Paper (Command 2901) that we proposed to enter into consultations with the Government of Malta, in accordance with Article 6 of the Defence Agreement, for a reduction of British forces there in the next few years. My noble friend Lord Beswick inititiated these consultations in Malta last August when he put forward proposals for reducing our forces to Defence Review levels by the end of 1968. In the light of the strong reactions of the Malta Government and of subsequent representations made in London by the Maltese Prime Minister, Her Majesty's Government concluded that the proposals should be modified in order to reduce their impact on the Maltese economy, principally by deferring the withdrawal of British Army units for two years until 1970.
"The revised proposals envisage the withdrawal of Her Majesty's ships based on Malta and the disbandment of a second R.A.F. Squadron during the current year, the ending of British responsibility for the Royal Malta Artillery during 1968, and the withdrawal of both British infantry battalions in 1970. At the end of the run-down one R.A.F. Squadron would remain and a range of defence facilities would be retained. As a consequence of these reductions British defence expenditure in Malta would by 1970 fall by about a half from its present level of £12½ million a year. The number of British servicemen would be reduced from the present level of about 4,300 by about two-thirds by the end of 1970.
"I visited Malta from January 12 to 17 to continue our consultations and to present these revised proposals to the Malta Government. I had a series 448 of meetings with the Prime Minister and his advisers and also had discussions with leaders and representatives of many sections of Maltese opinion. I explained that the reduction of our forces in Malta was part of a worldwide redeployment of our defence effort, the object of which was to secure the most efficient use of the resources available to us. It would make a significant contribution to the worldwide economies which we are determined to make, without in our view affecting our ability—or our determination—to fulfil our obligations under the Defence Agreement for the defence of Malta itself. We recognised that the run-down of our forces would create serious problems for Malta particularly during the early years. It was in order to lessen the impact on the Malta economy and in response to the representations made by the Malta Government that we were now proposing to phase the run-down over four years instead of two. These revisions meant, for example, that in 1969–70 the level of employment would be more than 2,000 higher and service expenditure in Malta more than £3 million higher than under our previous proposals. These changes, which were not justified on purely defence grounds, represented a considerable sacrifice of savings in defence expenditure which we could otherwise have achieved. I also referred to the exceptionally high level of aid, running at about £18 per head a year which, despite cuts elsewhere, we were continuing to provide for Malta. I offered our co-operation in measures to alleviate the consequences of our run-down.
"The Government of Malta stressed the serious economic difficulties and heavy unemployment which they contended even our revised proposals would cause for Malta, particularly during the first two years. They also maintained that with our revised force levels we should be unable to honour effectively our obligations to assist in the defence of Malta under the Defence Agreement. They claimed that we were in breach of the Agreement in failing to consult them properly on these matters in advance. Many other expressions of disquiet at the economic effects of the run-down were made to me.
449 "A summary of the views of each side is contained in the joint communiqué, copies of which I have placed in the Library. I undertook to report the reactions of the Malta Government to Her Majesty's Government but discouraged expectations of further changes in our proposals. After considering my report, Her Majesty's Government have confirmed, with regret, that they cannot offer any further changes in their proposals for the run-down and must now proceed to put these into effect. I have so informed Dr. Borg Olivier in a personal message.
"While Her Majesty's Government do not deny that even the revised proposals will cause difficulties for the Maltese economy, we believe that these will be only temporary. In the longer run, Malta's economic prospects are good; industry and tourism are expanding, and the dockyard is a valuable asset. I hope that our aid can help Malta to surmount these short-term problems and lay the foundations for future prosperity in the island.
"I cannot conclude this Statement without a warm personal tribute to the Maltese Prime Minister and his colleagues who received me with unfailing courtesy and consideration, despite the difficult mission we had come to perform. One cannot visit Malta without being conscious of the great good will which exists there for Britain, and I have every hope that this good will, which is born of over 150 years of close association, in peace and war, will survive our present difficulties."
§ LORD HARLECH
My Lords, we are most grateful to the noble Lord for repeating that Statement made by the Commonwealth Secretary. I think he will realise that it is a very grave Statement. I rather doubt whether the tributes paid to the Prime Minister of Malta in the last paragraph will compensate for the very harsh terms that have been imposed on his Government by the British Government. I think that there will be a feeling that the Government's actions are perhaps against the spirit, if not against the letter, of our Defence Agreement with Malta; and we on this side would wish to be convinced that Her Majesty's Government can carry out the commitments 450 they have entered into for the defence of Malta.
As to the effects upon the Malta economy, I have heard it suggested (and I wonder whether the noble Lord could confirm this) that in two years' time the rate of unemployment in Malta may rise to a figure of 17 per cent. Is that so? If it is, I think we should have to conclude that Her Majesty's treatment of Malta was niggardly on this occasion and that such treatment would not be acceptable to the people of this country, in view of our 150 years of close association about which the Minister spoke. We shall, of course, have to study very carefully the joint communiqué, which I understand is being placed in the Library, and if our fears about these actions are confirmed, it may well be that we shall ask for a debate on this subject at an early date.
§ LORD OGMORE
My Lords, I, too, am grateful to the noble Lord, Lord Beswick, for repeating this long Statement. We on these Benches are concerned about that part of the Statement which says that the Maltese Government are upset by reason of the fact that they claim that we are in breach of the Agreement in failing to consult them properly on these matters in advance. I think that the House would wish to know to what extent, if any, the British Government have failed to meet their obligations in this matter.
On the problems arising out of the Statement, I should like to ask a few questions. First, about the Royal Malta Artillery. Although it may be said that it is desirable to bring home some of our troops, why should it not be possible to continue our support to the Royal Malta Artillery, an old and honourable regiment for which we have been responsible for many years? Even in our present time of stringency, it seems to me that we could do something to keep on this old regiment, even if in a modified form. Surely that would be better than disbanding it altogether, as will happen.
I understand that the number of Servicemen in Malta will be reduced from 4,200 to 1,400, I should like to ask what will be the number of Service families who will be brought home, and where the Government are going to put them when they get them home.
451 Lastly, will the Government consult both B.E.A. and the charter air firms to try to provide much cheaper aircraft fares to Malta, because without far cheaper fares than obtain at present there cannot, in my view, be any great increase in the number of tourists to Malta. I do not accept the noble Lord's and the Minister's optimistic view of the long-term economic prospects of Malta. In view of the water shortage, apart from anything else, it has always been difficult to believe that there is likely to be any great economic advance, except possibly in tourism.
§ BARONESS EMMET OF AMBERLEY
My Lords, I wonder whether the noble Lord would elucidate one point. Is the saving mentioned by the Minister gross or net; that is to say, does the saving take into account the re-housing of families that will be brought home?
§ LORD BESWICK
My Lords, answering the noble Lady's point first, the saving will be on our expenditure in Malta. There will be, of course, other expenditures in this country. It is difficult to say what the net figure will be, because the fact that a man is housed in this country means that certain expenditures are saved. But the crucial point here, so far as the balance of payments is concerned, is, I think, the saving of currency spent overseas. I hear the murmurs all over the House about this. I assure the noble Lady, and all those who have reminded me that Malta is in the sterling area, that I am well aware of this fact. But having argued this point for some weeks with the Treasury, I am bound to say that I am convinced that money spent within the sterling area still affects our balance-of-payments considerations.
Turning to the noble Lord, Lord Harlech, I agree with him that this is a grave Statement, and if, after reading the details in the communiqué, he has further questions to ask, or if he wishes to raise the matter in any other way, we will endeavour to provide him with all the information for which he asks. So far as our obligation to consult is concerned, there is here a difference of opinion. All I can say is that Her Majesty's Government are convinced that they have honoured their obligation to consult with the Maltese Government before any reductions are made. It is the fact that, 452 since I first went there in August of last year, there have been continual discussions; indeed, these could, I should have thought, quite rightly be called consultations. As the result of those discussions, significant changes have been made in the proposed reductions.
So far as the Royal Malta Artillery are concerned, I fully understand the noble Lord's question. Everybody will wish to pay tribute, as he has done, to the service which they have rendered. But the fact remains that there is no continuing role for this regiment, so far as our defence requirements are concerned, and we have therefore reluctantly had to say that by 1968 we shall have to end our responsibility for the R.M.A. Whether it will be possible for the Malta Government to accept that responsibility is for them to decide.
The noble Lord, Lord Ogmore, asked, also, about the possibility of reducing air fares to Malta in order to assist the Island's tourist industry. As it happens, I have had discussions with the B.E.A. on this point. It is true to say that the lowest fare charged for flights overseas from this country, is the fare from here to Malta. In fact, I may say that we are in breach (and there is nothing underhand about this) of our I.A.T.A. Agreement by continuing to charge, for another year at any rate, a very low air fare to Malta. But this has had the effect of helping the Malta tourist industry. The real difficulty, so far as tourists are concerned, is not air transport, but the hotel accommodation on the Island.
§ LORD HARLECH
My Lords, the noble Lord did not answer my question about the level of unemployment which Her Majesty's Government think may obtain in Malta in, say, two years' time.
§ LORD BESWICK
My Lords, the short answer is that the 17 per cent. figure would not, I think, be an agreed one. But it is considerable and I should not wish to try to hide that fact. We hope, however, that as a result of the extension of the run-down period from two years to four years the original fears will be diminished, and it is hoped that in the extended time new jobs will be found by those displaced.
§ LORD MERRIVALE
My Lords, the noble Lord has referred in his Statement 453 to the phasing of the run-down of the Service personnel from two years to four years. Is it not a fact that, with regard to Maltese civilians, there will be 5,000 unemployed in two years (and this period has not been increased), and that in four years it will be 10,000? In fact, in the phasing there has been no change in the number of civilians who will be unemployed.
§ LORD BESWICK
My Lords, the numbers affected are indeed considerable, but it is not true to say that as a result of these consultations no changes have been made. As a matter of fact, so far as locally engaged personnel are concerned, considerable easements have been made. The figures, as I understand them now, are as follows. The British Services at present employ about 2,500 locally enlisted Maltese servicemen, including the 400 with the Royal Malta Artillery, and about 7,800 civilians. By the end of 1970—that is, the end of the run-down period—these figures will be about 750 enlisted servicemen, and 3,000 civilians.
My Lords, is the noble Lord not aware that, with the money we spend on the Island, Malta buys a vast amount of British goods which are sold to tourists from all over the world? From the point of view of overseas expenditure, I do not see that Malta is so different from, say, the Isle of Man or the Channel Islands. Is the noble Lord aware, also, that in the last ten years we have spent an enormous amount of British money on the balance and the quarters of the Forces in Malta, all of which, presumably, will be thrown away? Lastly, is the noble Lord aware that when the Royal Malta Artillery was reduced on an earlier occasion there was an opportunity, at least for the officers who were on long-term engagements, to transfer to our own Royal Artillery, but that, in view of the fact that there are so many redundancies in our own Royal Artillery, such a career prospect now is highly unlikely?
§ LORD BESWICK
My Lords, so far as the export element is concerned, it is true that a proportion of what we spend in Malta is used by the Maltese for buying goods from this country, and this must be taken into account when assessing the economic benefit to this country. It is not true to say that all we spend there is 454 used for buying British goods; but a proportion is. It is not 100 per cent.; nor indeed 50 per cent., but less. This aspect has, of course, been considered.
So far as accommodation is concerned, I recognise what has been said about this. It has been said by Members on this side of the house, too, from time to time, about other bases which Conservative Administrations have had to leave, that money has been spent on accommodation, which has then been vacated. I am afraid that if we are to make any reductions in our overseas defence commitments, this will happen. I only hope that better use will be made of the accommodation which we are vacating. I hope particularly, that, so far as the medical facilities are concerned, they will be of great value to the Maltese.
On the point with regard to the Royal Malta Artillery, again I have to accept what the noble Lord says: that the opportunities for enlistment in the British Services, particularly so far as the commissioned officers are concerned, are now much less than they were. So far as other ranks are concerned, I still hope that some will be able to find places within the British services.
§ LORD OGMORE
My Lords, may I ask the noble Lord whether he will reply to one question which I asked but which he has not so far answered? That is, about the number of families affected.
§ LORD BESWICK
My Lords, I did not answer that question because, quite frankly, I do not know the numbers of families involved. If it is possible to obtain the figures, I will let the noble Lord know. But, of course, the fact that we have extended the presence of the two battalions for a further two years means that this is not an immediate problem.
§ LORD BROCKWAY
My Lords, may I ask my noble friend, while recognising the need to reduce military expenditure, whether Her Majesty's Government have given full consideration to the services which the people of Malta have rendered to this country; how for years it was the naval bastion of this country; how in the last war we gave the George Cross to the whole of the Maltese population; how General Eisenhower said that their resistance had meant that the war had been concluded three months earlier than otherwise would have been the case? In 455 view of these facts, will our Government give them the fullest possible economic aid, in order that the economy of Malta may be changed from a naval to an industrial basis? And will they ask America and the United Nations, who both benefited from Maltese resistance, to make some contribution to a fund for that purpose?
§ LORD BESWICK
My Lords, the answer to my noble friend is that we shall do all that is possible; that we are now doing a good deal, and that should not be overlooked. Eighteen pounds per head of the population of Malta is not an insignificant contribution. So far as the naval facilities there are concerned, as my noble friend probably knows, the majority of those facilities are already being used as a civilian dockyard; and I hope this dockyard will be expanded for the benefit of the Maltese economy.
So far as the general point which he makes is concerned, I would say this to him. I recognise—and it would be true to say none more—the contribution made by Malta during the time of the war. I have emphasised the point in many quarters. It is a fact. But it is also a fact that people cannot go round, as my noble friend has gone round, demanding economies in general, and resisting each in particular. If we are going to make economies in military expenditure, all theatres will be affected.
§ LORD SHEPHERD
My Lords, in view of the fact that the noble Lord, Lord Harlech, recognised the importance of this matter and might well wish an opportunity for a debate, I wonder whether—as we have now been on the Statement for some 25 minutes—we should not now resume our consideration of the Companies Bill, on the understanding that if noble Lords wish to raise this matter we will see what can be done, through the usual channels, to provide the necessary time.