Amendments of Foreign Compensation Act, 1950

Part of Orders of the Day — Immigration Appeals [Money] – in the House of Commons at 12:00 am on 22 January 1969.

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Photo of Mr Tufton Beamish Mr Tufton Beamish , Lewes 12:00, 22 January 1969

First, may I take the opportunity of thanking the Under-Secretary of State for the very considerable trouble he has taken to answer a large number of questions that I have put to him, mostly in writing, since the Second Reading. Although he has not been able to resolve my serious misgivings about the Bill, he has shown great patience and forbearance, and I am most grateful to him.

Few if any Measures are passed without doubts and criticisms remaining in some quarters. However when we reach the Third Reading we can usually comfort ourselves with the knowledge that certain improvements have been made and a few points conceded or, at worst, careful scrutiny and vigorous debate have revealed some merit or justification that was not immediately clear to us at first sight.

I do not think that is so in the case of this Bill. The Foreign Compensation Bill has come through its stages unscathed. It has by no means improved on acquaintance. It remains, in words which have already been applied to it today, a shabby Measure. I think it is a furtive one, a hole-in-the-corner Bill, and unworthy of the Statute Book. My objections remain as strong as before. I snail refer to them briefly, as I have taken earlier opportunities to explain them in detail.

My objections are threefold. First, the Bill is yet another example of the way in which the present Government treat Parliament as a rubber stamp and flout proper democratic procedures. Secondly, I think the Bill places expediency above the law. Thirdly, it cheats the people of the Baltic States, including exiles in this country and abroad, of their title to their property. At the same time, it damages our reputation for fair dealing in the eyes of the world.

I propose to explain those objections briefly. First, how does the Bill flout the authority of Parliament? It does so in three ways, all of them serious. Discussions have continued off and on between the Soviet Union and the United Kingdom about the Baltic gold assets for almost 30 years, as the Under-Secretary told us—discussion, not negotiation. The Under-Secretary's reply to me that negotiations virtually started in 1959 was not completely accurate. Serious negotiations, as my right hon. Friend the Member for Bridlington (Mr. Wood) said, started in 1965, not in 1959 when the Order in Council was passed. The full responsibility for this Measure, as the Under-Secretary accepted, rests entirely with Her Majesty's Government and not in any way with the Opposition.

During recent negotiations I have constantly sought and been given firm assurance that no agreement would take effect without Parliamentary approval. For instance, I was clearly told in writing by the Minister of State, Foreign Office, that the realisation of the Baltic assets was subject to Parliamentary authority. That was in his letter to me of 15th June, 1967, yet exactly two weeks later, without Parliament so much as being informed, let alone consulted, the gold was sold. I elicited this information through two Parliamentary Questions. On 28th November, 1967, I was told: The gold was sold earlier this year and the proceeds invested ".—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 67.] On 6th December, 1967, I learned, also in reply to a Question, that the gold was sold on 29th June, 1967, two weeks after I had been given an assurance that it would not be sold without Parliamentary authority. That is scandalous. During two weeks in June, 1967 the Government changed their mind and broke their promise without informing Parliament.

Before the Anglo-Soviet Agreement of 5th January, 1968, was signed, the then Under-Secretary of State for Foreign Affairs told the House: It is the case that legislation would be required before the process of distribution took place."—[OFFICIAL REPORT, 23rd October, 1967; Vol. 751, c. 1351.] I hope that the Minister is taking note of those exact words. I assure him that there is no special pleading in my speech.

It is true that in Clause 1(5) the Custodian of Enemy Property is given powers to repay into the Consolidated Fund, out of the Baltic assets, the sum of £500,000 already distributed to the Soviet Union. At first sight, this might appear to be the fulfilment of the undertaking given by the Under-Secretary. No doubt the Government argue, in their devious way, that the payment to the Soviet Union was not a direct distribution of the Baltic assets. But this transaction was included in page 33 of the Supplementary Civil Estimates for 1967–68, which were not published until 15th February last year, a whole month after the £500,000 was deposited in the Bank of England to the credit of the Soviet Union. That is equally scandalous. So both the letter and the spirit of the promise given by the Government have been totally ignored.

My third example of the short-circuiting of Parliament is that shortly after the Anglo-Soviet Agreement was signed I asked the then Foreign Secretary why the £500,000 promised to the Soviet Union had been handed over without Parliament being consulted. He replied: The Agreement will be subject in due course to Parliamentary approval. If Parliament turns it down, that will be that.'"—[OFFICIAL REPORT, 23rd January, 1968; Vol. 757, c. 210.] But that will be what? What happens if Parliament rejects the Bill now? Not only has the £500,000 been handed over to the Soviet Union, but now we have been told that it has been spent. What happens to the waiving of the debts on both sides if the Bill is defeated?

The fact is that the Agreement was ratified by the United Kingdom when the Prime Minister signed it. He fell for what I can only describe as a confidence trick and paid over to the Soviet Union £500,000 which did not belong to him or this country. This shady deal is put before Parliament as a fait accompli, a procedure which could conceivably be justified only by extreme urgency, and even then I doubt whether it could really be justified. But there was not the least urgency in this case. My hon. and learned Friend the Member for Northwich (Sir J. Foster) was right when he said earlier that there was no need for an Agreement at all, and there certainly was no urgency. The Agreement was part of a package deal, the main purpose of which was to set the wheels in motion for a Treaty of Friendship with the Soviet Union.

This Bill is only a rotten little bundle in the package—incidentally the only item in the package that has not dissolved into thin air. There is no sign whatever of the Treaty of Friendship that was to be Britain's reward. Very much the reverse, as my right hon. Friend the Member for Bridlington (Mr. Wood) said in his excellent speech. This Agreement is hideously discordant with the terrible events today in Czechoslovakia, the death of Jan Palach, and other students trying to burn themselves to death. So much for the three positive ways in which the Bill represents the deliberate short-circuiting of Parliament, directly contrary to Government promises. I hope that when the Under-Secretary comes to reply there will be some explanation of why this has been done, although I very much doubt it.

My second major criticism is that this Measure places expediency above the law. The Under-Secretary summed it up when he tried to justify the Bill on Second Reading. He said: The Agreement with the Soviet Union and the measures to give effect to it which are now submitted to the House are to be judged by the criterion of what is practicable rather than by ideal standards of justice."—[OFFICIAL REPORT, 7th November, 1968; Vol. 772, c. 1106.] This was the start of the Under-Secretary's peroration, read from a carefully prepared brief. The Under-Secretary has tried to wriggle out of this by saying that the context clearly shows that he referred only to the effect of the Agreement for British claimants.

During the earlier stages of the Bill some of us accepted that. I have looked again at his words, and it is perfectly clear to me that the context of this is straightforward. I still find it difficult to put any interpretation on his words other than that he believed the Agreement and this Bill to be practicable rather than just. I believe that to be the case. It is practicable, although it is a pretty rotten Bill, and it is certainly not just. Whether it was practicable in the sense of making the best of a bad job, I very much doubt.

All laws leave an unhappy aftermath of legal and political problems. There are inevitably disputes about the ownership of property, the validity of treaties and such things as the recognition of new territorial boundaries. The illegal and forcible annexation of Estonia, Latvia and Lithuania by the Soviet Union places Britain in all these quandaries. That is no justification at all for disregarding accepted principles of international law and using Baltic assets in settlement of Soviet debts to British subjects which the Soviet Union refuses to meet. Imagine the outcry in Parliament had this Bill been presented in 1940, immediately after the Soviet occupation, or shall I say in 1941, during the Nazi occupation.

Imagine the outcome. The legal or illegal position has not changed since then. It is exactly the same, yet now we are asked to agree that the passage of years makes what was a grave affront to three friendly countries, brutally thrashed by bullying neighbours both respectable and acceptable—merely the passage of years! It is neither respectable nor acceptable to me. We have given the Government repeated opportunities to make it clear to the Baltic States and the world that Britain would be ready to make full restitution of Baltic assets when these countries regain their independence, as we all hope they will.

We have asked for verbal assurances, we have suggested that a restitution Clause might be written into the Bill. In refusing to do either of these things it seems that the Government have tried to justify their policy by the hollow pretence, of which we heard echoes again today, that when certain events injurious to Britain took place in the Baltic States in 1940 the Baltic Governments were in some way responsible for those events. We are asked to believe that they were not really under Soviet duress, that they were to some extent responsible for their own actions.

The fact of the matter, as we argued at length in Committee—and what we said then was not denied—is that these countries were not free agents, after the Soviet Union had crossed their frontiers, in any sense of the word, and in his heart the Under-Secretary of State knows that that is true. They were puppet Governments under direct Soviet orders.

For the purpose of the Bill, three small friendly nations, at present robbed of their freedom—for which they continue to pray—are treated as enemy countries. By Clause 1(2) their property may come under an Order such as might be made: .. in relation to enemy property if a state of war existed. When I raised this point in correspondence with the Under-Secretary of State, he explained again that the Baltic States became technically enemy territory by reason of the German occupation in 1941. Of course they did—we all know that. This we fully understand and accept. But he went on to say, in his letter to me dated 6th January: The reason why successive Administrations in this country have declined to make an Order terminating the status of the Baltic States as 'enemy territory' has been the need—in the absence of a Money and Property Agreement (such as was concluded with other States after the war)—to ensure as far as possible that Soviet interests were not in a position to procure the return of the assets to the Soviet Union. If the Agreement had provided for a simple transfer of assets to the Soviet Union in return for an assurance that it would spend £500,000 on itself and use the rest in part payment of its debts to British subjects, it would have come to exactly the same thing as we are benig asked to ratify.

Far from protecting the Baltic assets from the clutch of the Soviet Union, all we are doing is acting as bankers for the Soviet Union, settling its debts on its behalf at its request. That is all it amounts to. Had the Government not given the firmest and clearest possible assurance that the Agreement with the Soviet Union and this Bill should not be regarded in any way as a step towards de jure, recognition of the Soviet occupation of the Baltic States, Baltic peoples in their own countries and in exile would have had cause to feel the gravest anxiety and mistrust.

My feelings, when I come to vote against the Bill, must be those of anger and shame. This is a thoroughly bad Bill. It is highly questionable on a number of legal grounds. It is morally indefensible. It is a bad Bill brought in by an unprincipled and weak Government, and I will be no party to it.