HL Deb 12 November 1969 vol 305 cc740-56

8.15 p.m.

LORD COLYTON rose to ask Her Majesty's Government whether they can make a Statement on the failure of the Egyptian Government to honour the terms of the Financial Agreement of 1959 concerning British subjects in Egypt.

The noble Lord said: My Lords, I do not know whether it is necessary or proper that, in raising this issue afresh, I should disclose an interest as a former Chairman of the Anglo-Egyptian Resettlement Board. Nevertheless, I do so, and most wholeheartedly, as this is a cause which is very close to my heart. It is one which I fear, unlike the great and important issues which your Lordships have been debating this afternoon, has been swept under the carpet. Whatever view one may take of the events of the Suez Canal Zone in 1956, one thing is perfectly clear; namely, that among the principal sufferers were the members of the British community in Egypt, many of whom were deported at 24 hours' notice, and most of whom had their property nationalised or sequestrated.

The Anglo-Egyptian Resettlement Board, as my noble friend Lord Trevelyan, who was my colleague on the Board, will know, was set up in 1957 to rehabilitate those British nationals expelled from Egypt. It was, however, subsequently entrusted with the additional work of making ex gratia loans to British subjects who had suffered expropriation or sequestration on the basis of the value of their assets up to a maximum of £10,000 each. These actions were no doubt undertaken in the light of the Government's Statement at the time that the Suez operation had been taken in order, among other things, to protect the lives and property of British Nationals in Egypt. In this context, I would say that, as a result of the untiring and devoted pressure by the late Lord Killearn, repeated assurances were given by Her Majesty's Government at the time that the Egyptian sterling balances of £128 million frozen in London would not be released before British nationals had had their assets restored to them or had received compensation in full.

Here one must differentiate between British property in Egypt which was actually nationalised—or, as it was termed, "Egyptianised"—on the one hand, and property which was merely sequestrated; that is to say, was turned over to the Sequestrator General, as Custodian of Enemy Property, pending a settlement on the other. The former, nationalised property, was largely property belonging to large companies and to commercial firms. The latter was the property of private individuals, rich and poor.

On February 28, 1959, a Financial Agreement was signed with what had then become the United Arab Republic, designed to restore friendly relations between Britain and the U.A.R. In consequence of this, the U.A.R. paid £27½ million in full and final compensation for Egyptianised property and for certain losses arising as a result of sequestration measures. It was also clearly stipulated that British assets which had not been acquired outright by the U.A.R. but had merely been sequestrated would be restored within a period of three months to their owners or agents. In return, Her Majesty's Government undertook to release the frozen sterling balances, which, after deduction of £28 million belonging to the Sudan, and certain commercial debts, amounted to £75 million. This was carried out within a few days of the signature of the Agreement, and the money was used by the U.A.R. to settle debts which it had incurred in other countries.

Her Majesty's Government used the sum of £27½ million paid by Egypt to compensate the owners of Egyptianised property, albeit at a considerable loss to many of the claimants. But so far as the owners of sequestrated property were concerned, a long, heartbreaking and largely fruitless battle then began to regain what was left of their possessions in Egypt. The administrative difficulties created by the U.A.R., and the ingenuity of their officials, were apparent right from the start. It soon became clear that, even where token releases were made, the U.A.R., by pleading inter alia lack of funds for effecting transfers across the exchange, would not be meeting its obligations. This distinction immediately created inequalities between those categories of British subjects who had been fortunate enough to have all their assets Egyptianised, and whose claim could therefore be promptly established and met, and those whose assets the Egyptian Government merely claimed to have temporarily sequestrated. The latter—and these are the people whose cause I am pleading to-night—were placed in circumstances of particular difficulty, because even at that juncture discriminatory measures were being enforced against British nationals who had held permanent Egyptian residence visas, and who were not granted re-entry permits, even of a temporary nature, to enable them to go there to wind up their businesses. There is no doubt whatever that there was definite discrimination against members of the Jewish community.

As a result of failure to secure implementation of the 1959 Agreement, further discussions were held in 1962. In the main, these confirmed the clauses of the 1959 Agreement, with the object of properly carrying out the Agreement. Her Majesty's Government at the time agreed to lend the United Arab Republic the funds necessary to effect cash transfers of up to £E.5,000 per person. At the same time, Her Majesty's Government set up a Grants Committee with the object of assisting those British nationals who were destitute, or who had fared particularly badly at the hands of the U.A.R. When we consider these arrangements, my Lords, and the problems created by the transfer across the exchange, it is ironic that when the Tiepolo ceiling, which was discovered in the Egyptian Embassy in South Audley Street, was sold at Southeby's for half a million pounds, that was immediately placed on the external account and at once made transferable to Egypt. As a result of these events, many who had qualified for an ex gratia loan from our Board at the time of the Suez operation and were still in difficulties were assisted. On the other hand, pressure was brought to bear concurrently for substantial repayments out of the ex gratia Treasury loans. My own impression at the time a may be wrong about this) was that these repayments would be required only when full repayment of the losses by these persons had been made. What actually happened was that in many cases the amount of the loan was automatically withheld from any compensation received. It is known that in many cases little or no benefit accrued to the claimant beyond the cancelling of his debt to the Treasury.

We now come to a further stage, when a number of nationals whose assets were purported to be released in 1959 found that they had subsequently been either disposed of by the sequestrator, and the proceeds of the sale set aside, or re-sequestrated. In the case of some 150 to 200 British nationals, these further measures of sequestration and discrimination took place. They were imposed under municipal legislation, and I should have thought (although I am no lawyer) that that entirely contravened international law, since the Financial Agreement of 1959, as an international treaty, would automatically override any municipal legislation. Repeated protests and requests for information by Her Majesty's Government between 1960 and 1967 were ignored, but meanwhile the process of spoliation, confiscation, and maladministration went on unchecked. The value of the property thus affected is estimated to have been between £20 million and £35 million in 1956. According to an Answer which was given in another place by Mr. Rogers on February 9 of this year to Mr. Wall, these losses have brought down the estimated value of such property to £11 million, In many cases losses have accounted for more than 50 per cent. of the value of the property. I will not detain your Lordships unnecessarily, but I could quote from statements by the Prime Minister in 1959, and indeed from other statements in this House, where it has been said that Her Majesty's Government would if necessary provide further contribution from public funds to meet the cases of those who were in particular distress.

As a result of the failure of the Egyptian Government to implement in full either the 1959 Agreement or the 1962 Agreement, further conversations took place in 1967. It is apparent from a further exchange of Notes between the Governments of the United Kingdom and the United Arab Republic dated April 24, 1967, which were published, that this matter of the applicability of municipal law was something on which both Her Majesty's Government and the Egyptian Government appeared to be unwilling to accept responsibility for any further losses. It is believed that at the time the only reason why the Government of the United Arab Republic agreed to this exchange of Notes was in order to claim before the International Monetary Fund that the U.A.R. intended to respect its financial obligations. The forebodings of the claimants were made known to the Foreign Office at the time, but once again its seems to be the case that the rights—I will call them rights, and not just interests—of a minority have been sacrificed either in the interests of expediency, or in the so-called wider public political interest. If it is right to sacrifice someone's rights in the national interest, then surely the Exchequer should adequately compensate those who suffer losses as a result. As things stand to-day, some property which Her Majesty's Government know to be British property has not even been included in the schedules to the various annexes of the Agreement. I could give your Lordships numerous examples of further injustices and hardships arising out of these events. The hour is late, and I do not wish to detain you unduly, but I would remind you that the Foreign Compensation Bill of October 31, 1962, provided for the payment out of monies provided by Parliament of additional compensation in respect of claims arising in connection with certain events in Egypt. Under this Bill, Parliament can—as it sees fit so to do—make available further amounts, and replies given in the other place by Ministers at various times show this to have been done, so there is no problem on this score. Thus the machinery and the enabling Acts exist.

Meanwhile, I should draw your attention to one further development. The Government of the United Arab Republic has signed an Agreement with the Swiss Government concerning the liquidation of Swiss assets in the U.A.R. worth £E5 million. This Agreement, containing a most-favoured-nation clause, was followed by similar Agreements, on the same basis, with other Governments—those of the French, the Greek, the Lebanese and the Italians. All these Agreements were far less favourable to the claimants than were the original 1959 and subsequent Agreements with the British Government. I understand that the Government of the United Arab Republic is now maintaining that in the light of these fresh Agreements it cannot improve on the terms so far as British claimants are concerned, and it appears to be seeking to present Her Majesty's Government with a fait accompli so far as British assets are concerned. I must insist that British claims cannot in any circumstances be regarded in the same light as these other claims. British assets were sequestrated and have been under U.A.R. custody since 1956, while nationals of other countries were free to dispose of their assets at will.

I do not intend to detain your Lordships any longer. There are so many other issues which could be mentioned: the highly vexatious and, indeed, intolerable conditions under which British nationals are given access to the blocked balances in their banks in Egypt; the limitations on what they can draw; the refusal of visas to enable them to enter the country; the fact that if one does not draw during one year one loses £1,000, or whatever it is, for that year and cannot accumulate, and so on. It is a tragic situation and there are people—not merely rich people but many poor people—who are suffering from the results of these events at the present time.

A practical suggestion which has been made is that the Treasury might purchase these blocked accounts from their owners and make use of the funds for official British purposes in Egypt, or, if thought preferable, might dispose of them to the Egyptian Government on a Government to Government basis. The total value I believe now does not exceed much more than £10 million, and at least the owners would secure some sort of tangible immediate benefit. The same applies to the securities held by these unfortunate people in Egyptian banks. Would it not be possible for Her Majesty's Government to press for immediate permission to be given as of right to these individuals to dispose of their securities, so that the proceeds of the sale cart be added to the liquid funds in the blocked accounts and perhaps again used, taken over, by Her Majesty's Government as I suggested just now?

It really appears that, unless Her Majesty's Government recognise that the United Arab Republic has no intention of making genuine restitution, they must themselves accept moral responsibility for doing so and take active steps to put an end to this protracted interlude. I notice in a Press report of September 4 from Cairo, regarding the interview which the present Chancellor of the Duchy of Lancaster had with President Nasser on that date, that there was a reference to the fact that it was possible that the question of compensation to British nationals had been raised. There is a gleam of hope, and I hope that the Minister who is going to reply will be able to give us some encouragement to think that action will now be taken. But I believe that, come what may, justice must be secured for these unfortunate people who have suffered for 13 years through no conceivable fault of their own.

8.33 p.m.

LORD KILLEARN

My Lords, the noble Lord, Lord Colyton, has already dealt with some of the points I intended to tackle. My final position, however, is slightly different from his. I trust, therefore, that both he and other noble Lords will forgive me if I cover some of the same ground. I speak as a private citizen. I have never been directly involved in formulating official policy, nor, except for eight years as a war-time soldier, in carrying it out. I am involved to-day simply and solely for one reason, and that is that my father was so deeply interested, and indeed personally committed, in this cause. I have turned up most of the relevant passages in the OFFICIAL REPORTS—at any rate those in print—covering the years 1956 to 1964, which were the years in which he was vocal, and it is remarkable how steadfast, and indeed persistent, he was in his efforts to right not only what he regarded as but what was a glaring injustice.

Apart from his work and influence behind the scenes dealing with the leaders of the dispossessed British subjects and with various Government Departments, he took a very active part in this House in debates and Questions on a great number of occasions. OFFICIAL REPORTS which I have superficially looked at show well over thirty substantial interventions between 1956 and 1959, and as many again after 1959. He would be very gratified to know that I still receive appreciative letters arising from this crusade on his part. Mr. Mosseri, who first brought this unsatisfactory situation to the attention of the noble Lord, Lord Colyton, and myself, has now, I understand, taken over the mantle of Colonel Moore. The name of Colonel Moore was bandied about, sometimes rather unkindly I am sorry to say. I think his work was absolutely fantastic and he deserves a very honourable mention for his efforts during those years. As I say, to some extent I think that Mr. Mosseri has taken over his mantle, and he speaks not only for himself but for all other dispossessed British subjects. At this point it would be only right and proper for me to pay a tribute to the noble Lord, Lord Colyton, who was a colleague of my father before the war at the British Embassy in Cairo, and who not only has raised the subject this evening but in those earlier years—especially in those earlier years—between 1956 and 1959, played a valiant part, and I should think a very uphill and sometimes a rather frustrating part, too, as Chairman of the Anglo-Egyptian Resettlement Board.

When we are complaining about the 1959 Agreement, I think it is very hard for us now—or it is for me, at any rate, because I was not here—to recollect how grim a situation existed before 1959. As a Back-Bencher, I speak to-day not against any particular Government, but I speak for the rights of the citizen against all Governments. As I see it, a British subject resident in a foreign jurisdiction is, or should be, entitled to expect two things from Her Majesty's Government: first, that they should give him their full support and protection against arbitrary and/or illegal action by foreign Powers; secondly, that if through their actions and through no fault of his own his person or his property is put in jeopardy, they should themselves assume full responsibility for what they cannot recover on his behalf—I assume (I do not know what the legal basis was) that this was roughly the background and the justification of war damage payments during the war.

Of course, we all know that this is not so. In this age the individual counts for little in his own country, and even less abroad. This is an age not only of large battalions but also of large corporations. We have therefore, willy-nilly, to accept a situation wherein Governments, or at any rate the British Government, act under prerogative and not as agents for their subjects. This may sometimes seem unfair to individual subjects, but in the main it has worked, and continues to work, to their advantage.

The situation arising from the Suez action was intended to be regulated once and for all by the Agreement of February, 1959, but, unfortunately, it is rather more complicated than that. As I see it, the problem—it is still a problem—may, like Gaul, be divided into three parts. The first and second parts follow directly from that Agreement and the subsequent Exchange of Notes relating to it; that is to say, the Exchange of Notes published in 1962. The third part concerns events which have all occurred since 1959. some of which were covered by the 1967 Exchange of Notes, also now published. The first part of the problem concerns the compensation in this country in sterling of those who, between 1956 and 1959, had either lost their property completely through "Egyptianisation", which one might more reasonably call "nationalisation", or whose sequestrated property on return under the 1959 Agreement had suffered physical damage or monetary loss.

My earlier remarks about what British subjects might reasonably expect of Her Majesty's Government could well apply here. Indeed several speakers in another place during the key debate of March 16, 1959, obviously considered that in the special circumstances—and I think the phrase which was bandied about was "sui generis" which I believe means "in special circumstances" — Her Majesty's Government should take over full responsibility for any part of such losses which it was not able itself to recover from the Egyptian Government on behalf of the hapless British subjects. During that debate of March 16, 1959, at col. 150 in Hansard, the Prime Minister did not commit himself fully to that view, but in an earlier debate on April 11, 1957, at col. 1296 of Hansard, he had indicated that he was indeed thinking of full compensation. On the other hand, Her Majesty's Government can argue that it obtained an exceptionally good bargain, better than had ever been obtained before in such cases; that it has been generous, first by supplementing the Sterling Compensation Fund, and secondly, by introducing an open-ended procedure for dealing with claims. So although one may well feel that it is not enough, it is still a great deal better than what might have been; and for that one must be grateful. Speaking now about the Sterling Compensation Fund, I would inform your Lordships that to-day only 500 files out of some 6,500 are still outstanding, while out of a total of 9,000 claims, 8,500 have been settled. A validated claim for £5,000 has received £5,000; one for £50,000 received £40,000 and one for £500,000 received £265,000. The total claims so far are £107 million sterling; claims validated are £70 million sterling, and claims paid are £34 million sterling. Over and above the original £27½ million sterling paid by the Egyptian Government in 1959, Her Majesty's Government have contributed £6½, million so far. They have also provided interest-free loans totalling some £7 million to £7½ million sterling in anticipation of payment of claims. Moreover, they have provided some £2½ million sterling in outright grants in cases of hardship, and of course they have paid the servicing of the Compensation Fund and the servicing of the agents acting in Egypt on behalf of British citizens—better treatment than ever before, for which we must all be grateful.

But one could still say, and I do still say, that it is not enough. I am strengthened in this view by the statement of the Attorney General yesterday in another place concerning the agreement with the owners of the "Torrey Canyon". You will see that at col. 199 he said—or at least your Lordships will see when copies of Hansard are available—and I quote: The owners have agreed to make available a sum up to a total of £25,000"— sterling— for the purpose of compensating these claimants"— that is to say, private claimants— in both countries"— that is, France and England. This sum, on the basis of the information available to the two Governments, should be sufficient for that purpose, but if the cost of settling these claims exceeds this sum the two Governments have agreed to indemnify the owners against any excess"— I repeat "any excess"— in their respective countries'. I do not know what "sui generis" means; I do not know what is a special case. I do not know whether the "Torrey Canyon" is a special case. But if ever there was a special case where the plight of the British subject resulted, rightly or wrongly, from the actions of his Government, I should have thought the case of the British subjects in Egypt in 1956 was such a case.

The second part of the problem concerns the restoration of sequestrated property to its rightful owners. This is what the noble Lord, Lord Colyton, has dealt with, and indeed is the main subject of his Question. Here the situation is less satisfactory and, to me at least, less clear. The total involved was estimated by Mr. Macmillan in 1959 as 130 million pounds, which I believe to have been 130 million Egyptian pounds, of which some 50 million (which I take also to be Egyptian pounds) was the property of one corporation and was negotiated independently with the Egyptian Government by them. Of the balance, which is now, translated into sterling, the equivalent of some £60 million, it was estimated that roughly some £10 million related to land, £10 million to buildings, £30 million to various forms of personalty, £5 million to goods and £5 million to plant. Those are very rough figures. On the face of it the latter categories, or at least the last two categories, would seem to be the most likely to suffer physical damage. But in the hands of any bureaucracy a lot of depreciation can occur in such circumstances. I do not go as far as the noble Lord, Lord Colyton, because I do not know, but I can guess: one cannot assume that all concerned have always been meticulously careful to maintain the value of the assets entrusted to them during sequestration. That, I think, is an understatement.

An actual loss (direct or indirect) can, as explained earlier, justify payment from the Compensation Fund in London. However, it is perfectly clear that there have been endless delays and prevarications in making restitution of sequestrated property. In my eyes the "simplified procedure" which was introduced in 1962 still looks to be one of the most complicated I have ever seen. One may be quite sure that the sequestration itself in 1956 did not take very long and was not subject to any formalities. A short time ago many claims were still in suspense or had been turned down, very often without good reason. This applied not only to goods and property in Egypt; it applied to balances in banks and documents in banks, in Egypt or abroad, and there was no limit to the number of obstacles placed in the way of the rightful owners.

There was also the problem of charges made. In the 1959 Agreement there was an allowance of a very large sum of money, your Lordships might think—£2½ million—for the charges of the sequestrator, if you please. It seems that the sequestrator was now saying that he had overspent and wanted some more. Anyway, it is clear that any number of technical and legalistic reasons and obstacles have been introduced, simply and solely to make life difficult for the claimants, which is what the noble Lord, Lord Colyton, said. And, of course, when restored these assets are frozen. The quota of sterling exchange allowed for repatriation of capital is pitifully small. Starting from now and trying to work backwards down the records, I am not quite clear at what stage who was allowed £E5,000, equivalent to £3,750, and at what stage that was reduced to £1,000; it is all very complicated; but in any case it was pitifully small, bearing in mind that in 1957 Egyptian sterling balances in London totalled some £93 million sterling. I cannot quite relate this to Lord Colyton's figure of £128 million, which I am sure is correct. In 1956 I believe it was £111 million; in 1957, £93.3 million; in 1959 at the time of the agreement just under £70 million; and after we had reached this Agreement we finally handed £41 million back. Earlier we had given them £400 million for fighting the war on their behalf, but that is a long time ago. Certainly Egypt has a balance of payments problem; we know that. But the Treasury have been extremely helpful in accepting promissory notes and in other ways. Nevertheless, in 1964 Egypt defaulted on her contractual obligation under the Agreement to provide £750,000 sterling in exchange for the repatriation of British-owned assets.

Turning now to the third part of the story, I must say that this is to me the least satisfactory and the least clear of all. It seems that in 1961 a new round of sequestration was initiated and in 1962 a new round of nationalisation. The Egyptian Government has now agreed, as I understand, once again to restore sequestrated property, or, where it has been sold, the proceeds thereof. There is, however, this time no provision for damage or monetary loss arising during the period of sequestration. And of course we all know that property can be neglected, and even more so that forced sales can be extremely damaging.

Concerning the property nationalised in 1962, so far as I know no facts or figures are available, at least not to me. I hope, therefore, that the House, and the Minister who will be replying, will forgive me if I stray slightly outside the terms of the Question of the noble Lord, Lord Colyton, and ask for information about all that has been happening, or not happening, in Egypt to British-owned property since the signing of the 1959 Agreement.

8.53 p.m.

LORD TREVELYAN

My Lords, having been Ambassador to Egypt in 1956, I am naturally concerned that everything possible should be done for those British citizens who suffered as a result of Egyptian action after the Suez affair and who are still in need. I have a great admiration for all that the late Lord Killearn and the noble Lord, Lord Colyton, did on behalf of the British citizens concerned in helping to get them considerable relief, after I myself had been able to achieve very little for them on my return from Cairo.

I know also that since those days succeeding Governments and my successors in Cairo have made great efforts on their behalf and have helped them to a considerable extent, but not, as the noble Lord, Lord Colyton, has shown, with complete success. I also realise the limitations of action possible on behalf of British citizens who suffered, with Egyptians and nationals of other countries equally, from the subsequent round of sequestration and nationalisation. But I hope that every further effort possible will be made to help those who are still in need as a result of the first sequestrations. In particular, I hope that further efforts can be made to induce the Government of the United Arab Republic to honour Article V.I(b) of the 1959 Agreement, the undertaking that they would give favourable consideration to applications for further transfers into sterling in excess of the transfers up to £E5,000. I believe that they have not yet done so, presumably in view of their shortage of foreign exchange. I also trust that if there are still people who have not been able to get even their £E5,000 over the exchanges, they will be helped to get their rights under the Agreement at last. I trust that everything possible will be done to ensure that the inter-Governmental Agreements are carried out in full in every particular

8.55 p.m.

LORD BESWICK

My Lords, I appreciate the quite special interest which the noble Lord, Lord Colyton, and the noble Lord, Lord Killearn, have in this absolutely wretched matter, and I admire the continued interest and concern which has been shown by the noble Lord, Lord Trevelyan. I only wish that it had been possible for the noble Lord, Lord Colyton, to delay a little, just a day or two, before raising this Question, so that either my noble friend Lord Shepherd or my noble friend Lord Chalfont would have been able to answer. They of course have a more detailed knowledge of the business and a more immediate responsibility for these affairs. However, I shall endeavour to set out as clearly and as fully as possible what is the present position.

Ten years have passed since the Financial Agreement of 1959 referred to in this Question, and it will be unnecessary for me, after what has been said, to take up further time with a discussion of the merits or demerits of that Agreement or of the series of supplementary Agreements which followed it. The difficulties which have arisen in recent years appear to fall into three main categories: first, the difficulties and delays over the release of the property; second, the restrictions on transferability to this country; and, third, the fresh problems that have arisen out of the measures of sequestration which have been taken by the U.A.R. Government, quite separately from and subsequent to the events of 1956 to 1959.

The 1959 Agreement provided for the speedy release of sequestrated property to the owners. Unfortunately, as the noble Lord, Lord Killearn, and the noble Lord, Lord Colyton, have said, on the U.A.R. side the process was hampered by administrative confusion and red tape which resulted, in many cases, in long delays. Nevertheless, this task is now almost if not quite completed so far as the 1956 measures of sequestration are concerned. The few cases which remain to be dealt with have been held up because of difficulties and complications peculiar to each case. The U.A.R. undertook in Article V of the Agreement of 1959 to permit transfers of up to £E5,000 on account of assets which had been released from measures of sequestration, to those British subjects who had ceased to be resident in the U.A.R. The U.A.R. promised also to give "favourable consideration" to applications for further transfers in excess of that sum.

The provision for transfers of up to £E5,000 has been largely fulfilled, but some transfers have still to be made. A joint account for this purpose was set up in a London bank and put in funds by the U.A.R. This account now has a balance of nearly half a million pounds (I am not sure whether there is any connection with the amount the noble Lord, Lord Colyton, quoted for that ceiling), and this will probably be sufficient to meet all the sterling transfers still due. It has of course been a disappointment to everyone that the U.A.R. authorities have not seen their way to approve transfers over and above these limits. Those with funds which remain blocked in the U.A.R. naturally resent being denied access to their remaining assets. But I understand that even before 1956 a similar restriction of transfers of over £E5,000 existed in the U.A.R. I am glad to see the noble Lord, Lord Trevelyan, nods his head in agreement.

The grants made through the Egyptian Grants Committee have gone some way to mitigate any hardship. Opportunities do occur from time to time for these blocked balances to be sold for convertible currency to persons who are specially authorised by the U.A.R. authorities to buy them. It is also possible to use up to £E1,000 a year from blocked balances for personal expenditure on visits to Egypt. The Government have deplored, and still deplore, this continued denial of access to these assets. I can assure the House that the Government will not overlook any opportunity of securing an improvement in the transfer facilities.

The third kind of difficulty arises from the delays in releasing property of certain British subjects which was resequestrated in 1961. Some British subjects who had had their property taken in 1956 saw it taken once again under the measures of sequestration imposed under Proclamation 138 of 1961. I should add, however, that this proclamation was not restricted to United Kingdom nationals; it applied to many persons of other nationality, including some U.A.R. nationals. Annex B to the 1967 Exchange of Notes was designed to secure the release and return of this property, or the sale proceeds if the property had been sold while under sequestration. The first problem in this connection is the confusion which has existed in the U.A.R. sequestration departments concerned with this Proclamation 138 sequestration. This confusion still appears to exist, but it is gradually being sorted out and there has been better progress during the course of this year. During the last few weeks a Working Party of United Kingdom and U.A.R. officials has met in Cairo to discuss ways and means of speeding the release of these assets. There is no simple solution. The Embassy work very closely with agents and the sequestration department and are ready to examine every individual case. They are concentrating on getting a speedy release of the assets readily available in any particular case, so that any transfer of sterling which may be due can take place without waiting for a settlement of problems attaching to other assets of the person concerned.

Other delays have been caused by legal formalities connected with some of the property which had been sold, under Government decree, while under sequestration. The buildings which were sold need to be registered in the names of the buyers, usually State-owned insurance companies, and the formalities have been protracted. But this Working Party which I mentioned has been seeking ways and means of simplifying these formalities. It should now be possible to ease them in cases where property was owned by a single owner; the formalities cannot easily be waived in cases where a building was owned by several persons, particularly—as was sometimes the case—by joint owners who were of different nationalities. The Embassy are continuing to pursue these questions with the U.A.R. authorities.

My Lords, some dissatisfaction has been expressed at the prices at which some of these properties were sold. For the purposes of these sales the properties were valued according to a set formula, and it is not possible to dismiss out of hand the formula that was used. It is in fact used by the Egyptian Government for valuation of properties for the purpose of assessing estate duty. In some cases the valuations produced have not seemed unreasonable to the owners themselves. In other cases, and particularly with private villas, the valuation has been low. The U.A.R. authorities maintain that their valuations must stand, and they point out that they have been accepted by other Governments who have reached agreements relating to similar properties.

We have made repeated representations at all levels in Cairo with a view to settling these problems of the property re-sequestrated in 1961, and we shall continue to do so. We believe from the discussions in the last few weeks in Cairo that the Egyptian Government are anxious to settle these questions as quickly as possible.

The noble Lord spoke about the repayment of loans. I must say that I could not quite understand the point he made there, because Her Majesty's Government have always made it clear that in demanding repayment of the loans made they would always take into account not only the amounts recovered but also any evidence of continuing hardship. We shall continue, I assure noble Lords, to make every effort in Cairo to maintain and improve on the progress which has been made in recent months.