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Egypt (Compensation For British Subjects)

Volume 643: debated on Wednesday 5 July 1961

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Motion made, and Question proposed, That this House do now adjourn.—[ Mr. J. E. B. Hill.]

11.4 p.m.

I rise to draw to the attention of the House the plight of the British officials who were dismissed by the Egyptian Government in 1951. On 8th December, 1951, as the result of orders given by General Sir George Erskine—the propriety of which I do not question—British forces in the Canal Zone occupied and demolished houses outside the zone in the Egyptian village of Kafr el Abdu.

As a direct result of this event, next day the Egyptian Council of Ministers took the decision peremptorily to dismiss 168 British subjects who were employed by the Egyptian Government. Ninety-six of these officials were, by their contracts of service, guaranteed employment until the age of 60; 15 of them had already devoted more than thirty years of their lives to the service of the people of Egypt; a further 36 had devoted between twenty-five and thirty years' service.

The functions which they fulfilled are worthy of note and sympathy. Of the men, 19 were university professors, five were assistant professors, 45 were university lecturers, five were lecturers in institutes and colleges, 11 were inspectors in the Ministry of Education, 25 were senior schoolmasters and 17 were technical specialists. Of the women, 16 were lecturers in universities and institutes, 18 were school mistresses and senior school mistresses, three were inspectresses at the Ministry of Education, and one was a nurse. That was in December, 1951.

Between then and 1956 they received no compensation whatsoever from either the Egyptian Government which then was, or its successor, the United Arab Republic, nor any form of effective sympathy or support from Her Majesty's Government. In July, 1956, the British Ambassador in Egypt was able to report to the British Government that the Egyptian Minister of Foreign Affairs had expressed the hope that a satisfactory conclusion to the negotiations for compensation would shortly be agreed and that payments would shortly be forthcoming. However, those negotiations and their execution were overtaken by the events which are commonly described as the "Suez crisis".

In the course of 1956, and until April, 1958, in a certain number of cases minute sums for weekly sustenance were paid out by the Anglo-Egyptian Resettlement Board to support and keep alive a limited number of these unfortunate officials. I regret to say that in terms of public sympathy and effective Government support the claims of these officials, who were dismissed in 1951, have been overshadowed and forgotten because of the claims of those who lost their occupations and their property and their livelihoods in the events of the Suez crisis of 1956. The small weekly payments made by the Resettlement Board to some of the unhappy people were terminated in April, 1958.

In October, 1958, the British Government advanced £100,000, which was distributed among the "1951 claimants" whose total claims amounted to £660,000. Seven months later, Her Majesty's Government received from the Egyptian Government the sum of £100,000 on account, under Article III (f) of the Financial Agreement. That £100,000 was not distributed to the claimants, but was paid back into the Treasury, which had lent £100,000 previously, a Treasury which, I may say, maintains a claim against these unfortunate people and their representatives, the Association of Former British Officials in Egypt, for £5,000 which it advanced to the Association to meet the legal expenses of its lawyers in preparing and substantiating the claims of the 168 officials.

The situation up to April, 1959, was that the Treasury had been reimbursed for the loan which it had made, and from then onwards it paid out nothing in relief and has not even made a loan to these people who by then had been devoid of sustenance, apart from that given in the two years when there were very small weekly dollops and the total of £100,000, less than one-sixth of the claims for the period of eight years.

We have now arrived at 1961, nearly ten years since these people were deprived of their livelihoods. They have frequently received assurances from Her Majesty's Government that negotiations are proceeding and that a satisfactory conclusion is expected. But such assurances have not enabled them to meet their weekly bills for their everyday needs or to support themselves. All that has happened is that they have been forced to realise all the capital assets they may have had remaining to meet their weekly expenses.

In many cases their capital assets represented investments in British Government securities. This is not surprising, because when people are located in a remote spot, that is, remote from the United Kingdom, they are not able to adjust their investment portfolios to meet current movements in the market. It may have been stupid of them, but it was perhaps not unreasonable to invest in British Government securities, with the result with which all of us are only too unhappily familiar. Nat only have they been forced to consume their capital as income, but they have been forced to sell when the market for British Government securities is grossly depressed.

The £100,000 compensation, less than one-sixth of the total value of their claim, has had to be expended as current income so that even if they receive the remainder of their claim, they will have lost the interest on £560,000 over ten years, and, of course, they have not now the £100,000 to invest as well.

The situation in which they found themselves was that they had to remain in this country and live for two of the eight years on the minute assistance which they received from the Anglo-Egyptian Resettlement Board, for six years on nothing, and, since 1958 presumably, live on the capital which they received out of the £100,000. Some of them, in endeavouring to support themselves, have travelled to the far corners of the globe. One elderly lady, who was one of the 168 dismissed officials, is now supporting herself by working in Iraq.

These people have not thrown themselves on public sympathy. To some extent they have, therefore, been forgotten. They have not formed themselves into a noisy pressure group, and it is, therefore, all the more important that this House should safeguard their interests.

What obligations fall on the British Government? First, as the dismissal of these officials was the direct, and in my submission predictable, result of the actions of British military forces, however justified, in 1951, the British Government have a responsibility to ensure that the full claims of these officials are met. The fact that 22 of them have since died is irrelevant. They have dependants whose claims in equity are no less than if their husbands or wives had still been alive.

It is incumbent on the British Government to ensure that no agreement with the U.A.R. is accepted which does not meet in full the claims of these officials, plus a reasonable interest on the capital from which they should have derived their income for the past ten years.

Secondly, the least that the Treasury can do is to waive the claim to recover the £5,000 it advanced to the Association of Former British Officials in Egypt so that it could pay the lawyers who drew up and substantiated the claims of these unfortunate people.

Finally, the British Government have an obligation not to encourage any British subjects to take up employment with the U.A.R. until the just, legitimate, and substantiated claims of these British officials who were dismissed unilaterally, in breach of their contracts of service, have been fully vindicated. This, I regret to say, is not a purely hypothetical remark.

Earlier this year, advertisements appeared which were sponsored by the British Council, inviting applications from British subjects to serve under the Egyptian Government. The Times, on 6th April last, carried an advertisement —and this also appeared in The Times Educational Supplement—for lecturer-ships in English in the Higher Teachers' College in Heliopolis and two other places. The replies were invited to be sent to the Director of Recruitment, British Council, 65, Davies Street, London, W.1.

I submit that if the British Government lend support to the recruiting of British subjects for employment with the United Arab Republic while the claims of these British citizens dismissed in 1951 remain unsatisfied, then they are betraying their obligations to these officials and are also abdicating from any future ability to protect the rights of British subjects who may be arbitrarily dismissed in clear breach of contracts of service.

Egypt is a country with which the United Kingdom had a unique relationship; and one not only from history, but also by treaty. That treaty was still in force in 1951 and, therefore, I seek from my right hon. Friend the Lord Privy Seal assurances that the Government will not encourage any British subjects to take up employment in the United Arab Republic while these claims remain unsettled.

I would remind the House that the Export Credits Guarantee Department refused to underwrite credits to some South American republics which have defaulted on claims owing to British firms, on the ground that if it encouraged fresh credits it would be acting to the detriment of the previous creditors. The same analogy applies in the context of which I am speaking. I ask the Lord Privy Seal to persuade the Treasury—and I have given his hon. Friend the Minister of State adequate notice of these proposals to enable him to receive sanction from the Treasury—to say that it agrees that the claims for £5,000 for the solicitors' bill should be waived.

I look forward to hearing from the Lord Privy Seal not further assurances of good will towards these people, but a statement that their claims will be pressed fully by Her Majesty's Government and that, when they are paid, they will be paid not in blocked sterling assets in Egypt, but in available currency and that, in so far as some of the claimants have been forced to seek employment abroad, they will be able to take their compensation and invest it if they so desire in the country where they are now located.

These people have been without effective sustenance for ten years. Others who have been similarly placed since 1956 have received much more generous treatment. In neither case were we at war with the United Arab Republic, but in both cases the hardship suffered has resulted from—I will not say unjustified—but from the premeditated actions authorised by the British Government. These unfortunate people, 22 of whom have since died so that the number now is 146, look to the Government for effective redress.

11.20 p.m.

I am very glad that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has had the opportunity of raising this subject tonight. Although it concerns a comparatively small number of people, it is of the greatest importance to each one of them. They certainly have both the interest and the sympathy of every Member of the House, as well as of Her Majesty's Government.

My hon. Friend stated the position with moderation, clarity, and fairness. I thank him for his courtesy in telling my hon. Friend the Minister of State and myself before this evening the points which he wished to raise with us. I assure him of one thing, namely, that these former officials are certainly not forgotten. My noble Friend the Foreign Secretary has himself taken a very close personal interest in this matter since he came to the Foreign Office. I, too, have followed it very closely indeed, during the last eleven months. As my hon. Friend said, provision was made for compensation for these officials in the Financial Agreement which was reached in 1959. Therefore, I hope that he will accept our assurance that they are certainly not forgotten.

My hon. Friend has given the history of the problem. I do not wish to go over that. He has recalled that it arose from the incidents in the Canal Zone in 1951. The first step to deal with it was taken in the Exchange of Notes in 1954, when the Egyptian Government, as they were then, agreed to set up an Egyptian Commission to assess the compensation which should be paid to these officials. The Commission met in 1955 to carry out its business, but no settlement had been reached at the time of the Suez crisis. After this, nothing further could be done until the time when the Financial Agreement was being negotiated.

Under Article III (f) of the Financial Agreement the Government of the United Arab Republic did two things. First, they undertook to pay the United Kingdom Government £100,000 as an interim payment in respect of this compensation. Secondly, they agreed to
"cause the Commission to make a final assessment of the compensation due and permit the payment of the balance thereof in sterling."
The point my hon. Friend raised about the means of payment is, therefore, covered in the Agreement. As a result of strong pressure, the Egyptians eventually reconstituted this Commission; but I must tell the House, as I have said at Question Time on several occasions, that we have met with very great difficulty in extracting any final decision from the U.A.R. authorities.

Meanwhile, the officials concerned formed an association in this country, to which my hon. Friend referred, and discussed their problem with a firm of solicitors, which worked out what it thought should be due to the officials by way of compensation. My hon. Friend has indicated that this was quite a considerable sum. It was, in fact, in the region of £660,000. When Her Majesty's Government heard of this figure, in 1958, they decided to advance a total amount of approximately 15 per cent. of the compensation claimed, in the form of loans to the officials concerned. We did not know at that stage what we would be able to obtain from the Egyptians, but the advances made happened to amount to almost £100,000.

When the United Arab Republic Government paid over to Her Majesty's Government the £100,000 provided for in the Agreement, the loans made to the officials by the Government were converted into grants. So the indebtedness of the officials to the Government was cancelled. On 15th August, 1960, our mission in Cairo was told by the chairman that the Commission had formulated the criteria according to which compensation could be calculated. Our mission in Cairo then made repeated representations to the Commission about this. Mr. Crowe, who was then chargé. d'affaires in Cairo, made an appeal, on his farewell visit to Mr. Kaissouni, the United Arab Republic Minister of Economics, on 6th February; but no further information was received by us until the visit of Sir George Rendel to Cairo. He went from the Foreign Office to Cairo to discuss this matter and also various outstanding Egyptian claims. He was then told that the Commission was still working on individual cases.

On 13th March Sir George Rendel saw Hassan Abbas Zaki, Minister of Economics for the Southern Region, who promised to take the matter up and try to get a speedy settlement. Then, on 26th April, Sir Harold Beeley, our Ambassador, called on Hassan Abbas Zaki and reminded him of his promise to Sir George Rendel. Finally, on 1st June this year, a personal message was sent by my noble Friend the Foreign Secretary to the Minister of Foreign Affairs of the United Arab Republic, asking Dr. Fawzi to give this matter his personal attention, so that it might be settled at a very early date.

I have given these details to show my hon. Friend that since the Commission was reconstituted to deal with this matter we have made repeated representations at frequent intervals to members of the U.A.R. Government and to its officials, to reach a speedy settlement.

A number of Questions have been put to me in the House in recent weeks about this matter, and I have on each occasion reported the steps which have been taken, and I have said that I hoped a settlement was very near. I had also hoped to be able to tell my hon. Friend this evening that we had been given information that final decisions had been taken by the U.A.R. 'Government on this matter but, unfortunately, I am not yet able to tell him that.

The present position is that on 21st June—a fortnight ago—the Embassy in Cairo was informed that the Commission had finished its work and that its recommendations were being checked by the Ministry of Finance. But it was also told that in a few days' time, after this process, the report should be ready for consideration by Ministers, and that their decision ought not to be very long delayed. So we are now again hoping that we may receive a decision on this question in the fairly near future. I hope that I have demonstrated to the House that we are most anxious to receive a decision on the final amount of compensation which will be paid by the U.A.R. Government under the Agreement, and that we have made strong and frequent representations to obtain this.

My hon. Friend raised the question of the £5,000 costs which were involved by the members of the officials' association in obtaining a calculation of the compensation due to them. He gave us notice that he would raise this point. I am quite prepared to consider this matter when we receive information from the U.A.R. Government as to what they are proposing to pay in compensation, and to discuss it with my right hon. and learned Friend the Chancellor of the Exchequer. I cannot give any decision tonight, or any firm undertaking, but I will tell my hon. Friend that when we get the information from the U.A.R. Government which we are expecting shortly I will again look at the question which he has raised.

The last point that my hon. Friend mentioned was the question of the recruitment of British teachers by the U.A.R. today. This has also been raised on previous occasions in the House by my hon. Friend. When this proposal to assist in the recruitment of British teachers for the U.A.R. was originally considered, we consulted the Chairman and the Secretary of the Association of Former British Officials, to which my hon. Friend referred. We thought it right to discuss this matter with them. After consultation, they both agreed that in all the circumstances we should be justified in going forward with the proposals.

I have listened to the anxiety which my hon. Friend has expressed that this will compromise our position in regard to the claim for compensation for these officials, but I must tell him that, having examined it thoroughly and discussed it with the Chairman and Secretary of the Association, we do not consider that the interests of the 1951 officials would be betrayed by agreeing to co-operate with the Government of the U.A.R. in this matter. We think that it will help to improve relations between this country and the U.A.R., which is a process on which we have been engaged in recent months.

But I would also tell the House that we have pointed out, at the same time, to the Government of the U.A.R. that if this compensation question can be speedily and satisfactorily settled, then the recruitment of these new teachers for which they are asking could be very greatly helped. I hope that the U.A.R. will take this view, and, therefore, not only from the point of view of carrying out the obligations under Article III (f) of the Agreement in respect of compensation, but also from the point of view of ensuring the supply of teachers which they now require, they will achieve a speedy settlement of this question.

I think that the whole House would agree that we should all like to see an end of this matter and that in trying to achieve better relations between our two countries a speedy settlement by the U.A.R. of this matter would greatly help us and would be of great advantage to both countries.

I hope that my hon. Friend will feel that we have done our utmost for these officials. We have their interests very much at heart. We know exactly how much it matters to each one of them. As my hon. Friend very properly has said, this has gone on for a very long time, and we are all most anxious that we should have a settlement in the near future. I hope very much that it will now not he long before I can tell the House one day at Question Time that a satisfactory settlement has been reached.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes to Twelve o'clock.