Financial Assistance (Hansard, 18 February 1959)

§ Mr. Lennox-Boyd

On 18th February, 1958, I told the House that Her Majesty's Government had agreed to make available to the Kenya Government £1,500,000 to enable them to meet expenditure arising from the Emergency during the United Kingdom financial year 1958–59.

In consultation with my right hon. Friend the Chancellor of the Excheuer, I have now reviewed the Colony's financial position and future prospects.

Expenditure arising from the Emergency will again be reduced during the coming Kenya financial year, and indeed much of it has already been absorbed into the ordinary budget. But it will not be possible for Kenya to meet it from her own resources. The greater part of this money is being spent to good purpose on the rehabilitation of detainees and their resettlement after release. Expenditure arising out of the Emergency in 1959–60 is expected to be some £1,750,000. This would include £150,000 for the repayment of the first instalment of loan capital, of which £5.25 million has so far been advanced to Kenya with a moratorium of five years on repayment.

In 1960–61 and subsequent years, however, Kenya can be expected to absorb the whole of the remaining Emergency burden arising on recurrent account. It has therefore been agreed with the Kenya Government that 1959–60 will be the last year in respect of which Her Majesty's Government will be asked to help finance recurrent expenditure arising from the Emergency.

To help Kenya to meet this expenditure during the years immediately following 1959–60 Her Majesty's Government have agreed that the moratorium on the repayment of all loans for Emergency expenditure shall be extended for a further three years. This will reduce the 1959–60 estimate of Emergency expenditure to £1,600,000.

Taking this change into account, Kenya will still need substantial help during the 68W coming year. Subject therefore to the approval of Parliament, Her Majesty's Government will be prepared to provide Kenya with a further grant of £800,000 and an interest free loan of the same amount for the United Kingdom financial year 1959–60. As in previous years, this assistance will be called upon only to the extent that it proves necessary.