HL Deb 25 January 1973 vol 338 cc250-2
LORD BROCKWAY

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 what conclusions have been reached on the application of the Government of Malta for an increase in payment for the British base in view of the devaluation of the pound.

EARL FERRERS

My Lords, under Article 7 of the Military Facilities Agreement, under which Britain uses defence facilities in Malta, the Government undertook to make payments totalling £14 million sterling in a full year. The British Government have informed the Maltese Government that they are not prepared to alter the payments.

LORD BROCKWAY

My Lords, while thanking the Minister for that reply may I ask this further question? Irrespective of other issues and the exchanges of diplomacy, would it not be fair of this country to make up to Malta what she has lost as a result of the floating of the pound? Have not six NATO countries agreed to advance their contributions? In view of the fact that only £35,000 is at stake, would it not be desirable to get a good feeling upon this issue?

EARL FERRERS

My Lords, I understand that the Maltese Government have been informed that certain countries would be prepared to make special payments, but I am bound to tell the noble Lord, Lord Brockway, that that is of course wholly outside the agreement made between this Government and Malta for the £14 million. Obviously the agreement was in pounds sterling, and I am sure the noble Lord will agree that it would be impossible for the Government to underwrite the effects of any future changes of parity over any agreement they may make.

LORD BROCKWAY

But, my Lords, is it not the case that there was an exchange of letters putting the different points of view on this matter between the Maltese Government and the British Government before the Agreement was signed, but that, despite that exchange, the agreement made no reference to this subject? And may I ask the noble Earl why there is this secrecy? Is it not a fact that six NATO countries—Italy, the Netherlands, West Germany, Canada, the United States of America, and one I have forgotten—have all agreed to meet the difference between the new rate of sterling and the old rate of sterling? Why should we quarrel over this comparatively small sum?

EARL FERRERS

My Lords, it is perfectly true that some countries have agreed that, as a result of the floating of the pound, they have spent less than they had anticipated spending and they have been prepared, as I understand it, to make up this difference. But I am bound to make the point that this is a totally separate issue from the agreement itself. So far as this country is concerned, the noble Lord, Lord Brockway, is perfectly right: Mr. Mintoff asked for what he called a guarantee against devaluation. He was told that we should not be prepared to agree with this. We informed him in writing before the agreement was made, and he signed the agreement on March 26 fully knowing what the British position was.

LORD SHINWELL

My Lords, may I ask the noble Earl whether it is not about time to recognise that, although one knows the difficulties that confront the Maltese Government, or Mr. Mintoff himself, financial aid by the United Kingdom to Malta is now just an act of paternalism and has nothing whatever to do with strategy? It has just become a barracks, a very limited barracks, with no strategic value whatever; and that is the opinion of all the accredited military chiefs.

EARL FERRERS

My Lords, NATO is concerned with the continuing presence of Britain in Malta. We have our obligations towards NATO and for this reason we are carrying out those obligations.

LORD MAYBRAY-KING

My Lords, is the noble Earl aware that, while everyone in this House appreciates our indebtedness to Malta who won the George Cross for what she did in the War, and realises the importance of Malta to the NATO defence programme, there is a limit to what Britain can pay, and that limit is reached in the treaty which the Government have signed?

EARL FERRERS

My Lords, I am very grateful indeed for those remarks, which of course are most welcome. Malta and Britain always have had good ties, and we wish those to continue. I would only re-emphasise that we are carrying out strictly our obligations under the agreement which we believe to be fair and just.

THE EARL OF ONSLOW

My Lords, in the possible, but unlikely, event of the up-valuation of sterling presumably the Government would not then reduce their payment to Malta, so Malta cannot have it both ways?

EARL FERRERS

My Lords, that is perfectly correct, and Mr. Mintoff did not ask for that when he asked for the other undertakings.