MALAYSIA BILL (Hansard, 26 July 1963)

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HANSARD 1803–2005 → 1960s → 1963 → July 1963 → 26 July 1963 → Lords

Sitting

MALAYSIA BILL

HL Deb 26 July 1963 vol 252 cc932-79 932

§ 12.14 p.m.

§ Order of the Day for the Second Reading read.

THE LORD CHANCELLOR (VISCOUNT DILHORNE)

My Lords, I have it in Command from Her Majesty the Queen to signify to the House

that Her Majesty, having been informed of the purport of the Malaysia Bill, hasconsented to place Her Majesty's privilege and interest, so far as they are affected by

the Bill, at the disposal of Parliament for the purpose of this Bill.

§ THE MARQUESS OF LANSDOWNE

My Lords, I beg to move that this Bill be now read a second time. Last night, for

reasons which I do not know but for which I am none the less grateful, my right

honourable friend the Colonial Secretary did not include me in his all-night sitting.

933§ THE EARL OF LISTOWEL

My Lords, the noble Marquess meant the Commonwealth Secretary, not the Colonial

Secretary.


I meant either or both. This enabled me to go to bed a little earlier and while doing so

to listen to the wireless. As I listened, I heard important news items, among others an

account of the Paris collections—charming little chiffon dresses, tweed stockings,

deep plunging necklines—and then, the initialling of the Test Ban Treaty. I hope that

in a balanced item of news today perhaps this Malaysia Bill may also find an

honourable place.

As your Lordships know, it was only on July 9 that the Malaysia Agreement was

signed. We had hoped that this would have been done earlier, but there were

difficulties in the negotiations; in particular, about the establishment of a Malaysian

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common market and the financial arrangements between the Federation and

Singapore. These were very complicated matters and it would not have been right to

attempt to rush them. It was essential that fairly detailed agreement should be reached,

if Malaysia was to start on a sound and economic basis. This, together with the need

to get this Bill through before the Recess, because the date for the creation of

Malaysia is August 31, means, I regret to say, that I am asking your Lordships to pass

this Bill through all its stages today.

I hope to show, however, that the arrangements set out in the Command Paper were

slowly and painstakingly worked out and have been the subject of most careful and

patient consideration by all concerned, so that they truly represent the wishes of the

peoples of the new States, as well as of the present Federation of Malaya, and they

incorporate the safeguards which local opinion in those States requires. The Bill itself

provides for the relinquishment of Her Majesty's sovereignty over North Borneo,

Sarawak and Singapore, so that they can federate with the existing States of Malaya in

accordance with the Malaysia Agreement, which was signed by representatives of all

the Governments concerned. A clause by clause description of the Bill is, I think,

scarcely necessary. The clauses are the usual ones in a Bill of this kind.

934 The idea of a Malaysia Federation has been in the minds of many for a long time.

This idea was first translated into action in May, 1961, when Tunku Abdul Rahman,

Prime Minister of Malaya, proposed an understanding with Singapore and the Borneo

States. This proposal evoked an immediate response in all the territories, and the idea

gradually took hold of the imagination of the peoples so that now there is a real

enthusiasm for the Federation of Malaysia. In July, 1961, at a regional meeting in

Singapore of the Commonwealth Parliamentary Association, a consultative committee

was formed under the chairmanship of Mr. Donald Stephens, one of the foremost

political leaders in North Borneo, to exchange views on the form Malaysia should

take. Right from this early stage the political leaders in all the territories took the

initiative in working out concrete proposals for bringing Malaysia about.

From the start it was recognised by all concerned that the most important step was to

ascertain the feelings of the people themselves. In Singapore the Legislative

Assembly, in December, 1961, passed a motion supporting Malaysia in principle. In

Borneo, with its primarily rural population, it was more difficult to find out how people responded to an idea which, to all but the leaders, was a new one. The British

and Malayan Governments agreed, as stated by my noble friend the Duke of

Devonshire on November 28, 1961, that agreement had been reached that the creation

of the Federation of Malaysia was a desirable aim in the interests of the people

concerned, and that a Commission was to be set up to ascertain the views of the

inhabitants of North Borneo and Sarawak.





I am glad to see that my noble friend Lord Cobbold, who was Chairman of that

Commission, is in his place today. I am sure that the peoples of North Borneo and

Sarawak have every reason to be very grateful for the work of his Commission which

visited their countries between February and April, 1962, and which in the course of a

most arduous itinerary held 50 hearings at 35 different centres, interviewed personally

over 4,000 people in some 690 groups, and carefully studied some 2,200 letters and

memoranda which they received from individuals and associations. Every shade of

opinion, from those hostile to the idea of 935 Malaysia to those who were convinced it

was the right solution, came forward. The Commission reported unanimously in

favour of Malaysia and that Malaysia was supported by two-thirds of the peoples of

Borneo provided that safeguards could be devised to meet their special conditions.

The Cobbold Report was published on the 1st August last year. On the same day, a

joint statement was made by the British and Malayan Governments, in which it was

agreed in principle to establish Malaysia by August 31, 1963, and meanwhile to set up

an Inter-governmental Committee to work out detailed arrangements and safeguards

for North Borneo and Sarawak. During August, Tun Razak, the Deputy Prime

Minister of Malaya, and I (I left the United Kingdom on the 12th, I remember) visited

the two territories with the primary purpose of setting up this Inter-governmental

Committee, of which a preparatory meeting was held on August 30. Together we

travelled the territories extensively and met as many of the leaders of the people as

possible, and talked also with the expatriate and locally employed officers. He

explained the concept of Malaysia and described how the Inter-governmental

Committee would work.

We did not, of course, repeat the work of the Cobbold Commission, but we thought

that it was important that Ministers from both Malaya and this country should

themselves see and hear at first hand how people had reacted to the Malaysian concept

since the departure of the Cobbold Commission. At the preparatory meeting of the

Intergovernmental Committee it was agreed that sub-committees should be set up to

deal with constitutional, fiscal, public service, legal and judicial, and the problems of

departmental organisation. A great deal of really solid work was done by these sub-

committees, and I should like to pay my tribute to the political leaders and to the

officials who gave so much of their time and so much of what should have been their

leisure hours to this work, and thereby made it possible to complete the task in 11 plenary meetings held between October 22 and December 20. I remember very well

that our last plenary meeting was in December, and it was 936 only when I was in the

waiting room at the airport that the final decision was reached on the allocation of

seats between Sarawak and North Borneo. All concerned, I think, deserved our

gratitude and a word of praise for the way in which they carried out their arduous task.







Sir John Martin, the Deputy Under-Secretary of State in the Colonial Office, stayed in

Borneo throughout this period and was a most able chairman of the sub-committees.

An immense amount of work fell on the local Administrations, both while the

Committee was sitting and also throughout the last six months. Meanwhile, of course,

they had their ordinary work of administration to get on with, and this work became

increasingly exacting as a result of the Brunei revolt.

The Report of the Inter-governmental Committee, which was published in February

this year, was a unanimous Report. The representatives of North Borneo and Sarawak

were satisfied that the safeguards which they considered necessary to meet their

special conditions had been obtained. At the same time, they accepted the necessity

for the Federal Government to have sufficient authority to hold the Federation

together, and to build up a strong federal unity. The Malayan gesture of goodwill in

agreeing that the Borneo States with a population of 1¼ million out of a total of 10

million should have 40 out of 159 seats in the Federal Parliament, was a decisive

factor in convincing the Borneo leaders that there was here no question of a takeover

bid, but a genuine offer of real partnership.

Partnership is the essential element in the agreement reached by the

Intergovernmental Committee. The Borneo States will have, as of right, funds to

maintain and increase State services. Even in a major Federal subject like education, it

was agreed that the policy and system of administration should not be changed

without the consent of the State Government. Medicine and health, although this

would normally be a principal Federal subject, will in North Borneo (though not in

Sarawak) be a concurrent subject until 1970, because this was the wish of the people's

representatives. In immigration—again a subject that is normally entirely

under 937 Federal control—the States have been given protection against the

unrestricted movement of people from other parts of the Federation; and, except in

specified circumstances, entry into the Borneo territories will require the approval of

the State concerned.

Although Islam will be the religion of the Federation, there will be no State religion in

the Borneo States, and no law can be enacted restricting the propagation of other

religious doctrines, even among Muslims, without a two-thirds majority of the State

Assemblies. I should perhaps mention that in Sarawak 23 per cent. of the population isMuslim, and in North Borneo I think it is 37 per cent. This was a matter to which the

Borneo leaders attached the greatest importance. They were also determined to

maintain English as an official language, even though Malay will be the national

language of Malaysia—a position which is to be maintained for ten years and cannot

be changed, even then, without the argument of the State Legislature.





Citizenship too is a matter to which great importance was attached. The

recommendations of the Cobbold Commission were unanimously endorsed by the

Inter-governmental Committee. Any citizen of the United Kingdom and Colonies who

was born, naturalised or registered in North Borneo and Sarawak and was ordinarily

resident in the Borneo territories on Malaysia Day will automatically become a citizen

of Malaysia. Any other person over eighteen years of age and ordinarily resident will

be able to apply for registration as a citizen of Malaysia within eight years, subject to

Certain qualifications, of which the main one is residence in Malaysia for seven out of

the ten preceding years.

But it would be a poor Federation that was based upon negative safeguards. I am

convinced, and I am satisfied that the peoples of Borneo are convinced, of the clear,

positive and compelling advantages of Federation. They know about the success story

of the Federation of Malaya, and they are determined that in the wider context of

Malaysia there will be equal success. The political and defence advantages of

federation are obvious. An Independent North Borneo and Sarawak outside Malaysia,

even if they had united, might at some time in 938 the future have offered a great

temptation to acquisitive adventurers. Clearly the continuation of colonial rule would

have become increasingly anomalous.

Economically, as a recently published report by a Mission of the World Bank, headed

by my friend M. Rueff, has said: Unification will at the minimum create a larger

economy which is more economically diverse than any of its component parts. I think

the diversification of the economy of Malaysia is very important. M. Rueff goes on to

say: Each territory is now heavily dependent on a few traditional sources of income

and employment. With its wider resource base Malaysia's economy as a whole would

enjoy greater stability than any of its components". To Borneo itself Malaysia offers

the best prospect to enhance the rate of development and of bringing her standards of

social service to higher levels. It is the conviction that Malaysia will mean increased

development that has been one of the powerful stimuli in moving public opinion in

favour of achieving independence through Malaysia. Under the arrangements worked

out in the Inter-Governmental Committee, and in the recent London talks,

development of the order of nearly £60 million—almost double the rate of present

spending—should be possible in the first five years of Malaysia. It is not, of course,

only on the unanimous agreement reached in the Inter-Governmental Committee thatacceptance of Malaysia in the Borneo territories rests. Already in September, 1962,

before the Committee had really got down to work at all, the Council Negri, which is

the senior Council in Sarawak, and the Legislative Council in North Borneo passed

resolutions, with no dissentient vote, welcoming the decision in principle to establish

Malaysia by August 31. In December the North Borneo local elections resulted in an

overwhelming victory for the pro-Malaysia candidates. Then in March this year, the





two Legislatures adopted, again unanimously in North Borneo and with no dissentient

vote in Sarawak, the recommendations of the Inter-Governmental Committee.

In Sarawak new elections have recently been held, as a result of which the Sarawak

Alliance, a strongly pro-Malaysia Party, has the support of 26 members out of a total

of 36 elected members. Of the Opposition parties the 939 Party Negara, with fiveseats, is pro-Malaysia, and its leader was one of the signatories of the London

Agreement. The Sarawak United Peoples Party, S.U.P.P., with five seats, are the only

ones to entertain doubts about Malaysia, and even they are not unreservedly opposed

to the idea, and, indeed, the head of the Party, who I know personally quite well, is

pro-Malaysia. I have taken the time of the House to explain in some detail the

safeguards that have been negotiated for the Borneo territories, and to show that the

wish of the peoples in those countries to join Malaysia has been repeatedly and

unequivocally expressed.

I should like to say a word about Singapore. The Heads of Agreement betweenMalaya and Singapore, which were published in November, 1961, provided that

Singapore would be a State within the Federation, but on special conditions and with a

larger measure of autonomy than the existing States; that is, the eleven States of the

Federation of Malaya. For example, education and labour, which in the existing

Federation were Federal subjects, would be the responsibility of the Singapore

Government. In order to discharge these responsibilities Singapore would retain a

large proportion of the present State revenue. Taking these factors into account, it was

agreed that Singapore would have fifteen seats in the Federal Parliament, a smaller

number than would be proportionate to her population of 1.7 million.

A Committee of representatives of the two Governments began to work out the

detailed terms of merger last December. Agreement was reached on nearly all matters

during the following months, but a few matters—and these were very important ones

and mainly financial—were still unresolved at the middle of June, and were finally

settled at the recent discussions in London. Agreement was reached on the

arrangements for establishing a common market in Malaysia, and these arrangements

are set out in an annex to the Malaysia Agreement. It was also agreed that the revenue

from Federal taxes collected in Singapore would be divided in the proportion of 60

per cent. to the Singapore Government and 40 per cent. to the Federal Government,and that to 940 assist development in the Borneo territories the Singapore Government

would make available fifteen-year loans totalling a sum of 150 million dollars. This

happy outcome could not have been achieved but for the determination to reach

agreement shown by those who took part in the final talks in London.

It is a cause of regret that the Sultan of Brunei decided not to sign the Malaysia

Agreement. We have, of course, all along taken the view that it was entirely a matter







for him to decide whether to join Malaysia, but we have repeatedly made it clear that,

in our view, it is in Brunei's best interest to join, and we still hold this view. The door

is still open for Brunei's accession, and we hope that it will decided to go in.

I am convinced that the foundations of Malaysia, which have been laid so carefully

during the past two years, are solid and that politically and economically we have hereall the ingredients for a repetition of the success story of the Federation of Malaya. I

am sure that this will be so, despite the storm clouds that have in the past months

gathered round the Malaysian horizon. In these circumstances, it is, of course,

particularly important that the existing Anglo-Malayan Defence Agreement will

extend to the whole of Malaysia. We in this House, and I am sure I speak for all your

Lordships, wish Malaysia well, and I ask that this Bill should be given an unopposed

passage through your Lordships' House to-day. I beg to move.

§ Moved, That the Bill be now read 2a.—(The Marquess of Lansdowne.)

§ 12.41 p.m.

§ LORD SHEPHERD

My Lords, I am sure the House will be grateful for the manner in which the noble

Marquess has introduced this Bill this morning. We have no criticism of the fact that

the Bill comes at this late stage; we fully appreciate the circumstances that have

caused this; but I feel there is some regret that this Bill, as in another place, should

have been introduced on a Friday. The House, naturally, on these days is sparse, our

Benches in the main are empty, and I should not have thought that this was themanner in which either House would wish to consider what is an historic Bill.

It is strange that this small Bill of five pages, six clauses and three

Schedules 941 should open the way to the creation of a new nation. My Lords, this

Bill is the key. All the protections that were desired by the States, by the Federation of

Malaya and the State of Singapore, are included in this document. It is a formidable

document, as the noble Marquess said, and those who have some knowledge of the

negotiations will understand the amount of dedicated work that was put in, not only

by the Minister but by the many officers in the various countries and we are very

grateful to them.

Praise obviously must be given to Mr. Duncan Sandys, the Minister for the

Commonwealth and for the Colonies. He, particularly in the last stages, brought

considerable drive to bring about a conclusion. But I think it is right that in this House

we should pay a special tribute to two of our own Members: in the first instance, the

noble Marquess, who for a considerable time, was Chairman of the Inter-




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governmental Committee that was set up to negotiate and to bring this Bill to fruition.

I think he brought the right and only character that would have been acceptable in-

South-East Asia, a character of patience and of mastery of the gentle word. These are

vital characteristics for negotiations in Malaya. I suggest, too, that we should pay a

tribute to the noble Earl, Lord Selkirk, High Commissioner in Singapore and

Commissioner General for South-East Asia. I have heard from my friends in

Singapore great tributes not only to him but also to his wife for the way they have

smoothed over some of the misunderstandings and some of the strain that existed

when he went out there and which grew up as these negotiations proceeded.

Therefore, we are grateful to both of the Members of this House.

Perhaps one of the two main actors in this matter is our very old friend—and I think

we can refer to him as "our very old friend"—the Tunku Abdul Rahman, Prime

Minister of Malaya. He is already a man of great stature and a respected Prime

Minister of the Commonwealth. As the noble Marquess has said, it was he who made

the declaration that a Federation of Malaysia should be created. This was not a new

conception—there had been much talk about it over many years—but it needed a man

of his stature and his leadership to make this possible. In my view, this Federation

could not have 942 been created at the suggestion of the United Kingdom; it had to

come from the people themselves. I think we must recognise, too, that under his

leadership the Federation of Malaya has made a number of concessions which took a

good deal of heart-searching to make.

I think a very special word of appreciation should be given to Mr. Lee Kuan Yew, the

Chief Minister of Singapore, the other main actor. He had the most difficult task and

most difficult road to tread. He believed in federation but he had first to create the

political climate in the State to make that possible. There were many fears, in bringing

what is largely a Chinese population into the Federation, that they would be dealt with

more hardly by the predominantly Malay rulers of Malaya; but, by great

determination and considerable political ability, he created the climate for federation

in Singapore. As we have heard from the noble Marquess, a referendum was held

which was overwhelmingly in support of the Federation. I think we should give great

credit to Mr. Lee Kuan Yew. He has achieved considerable concessions for the State,

and, in his way, too, he has had to make some sacrifices, but he has brought it through

and it is now acceptable.

It must be of considerable irony that yesterday we dissolved the Central African

Federation, yet here we are to-day passing a Bill to create another Federation. The

great difference is that the Central African Federation was one that was imposed upon

the people there by the United Kingdom Parliament, whereas this Malaysian

Federation stems from the will of the people who are involved. This is a great





difference, and I suggest to Parliament that this should be the example. Before you

can move forward you have to see that the peoples are behind you, and, above all else,

that they themselves understand the implications of their own agreement. Therefore,

we look to this Federation with considerable hope. The noble Marquess has said that,

apart from Singapore, the other States themselves have declared their position, and, as

we know, the Cobbold Commission reported in similar terms. May I say how pleased

we are to see the noble Lord is in his place and to know that he will take part this

afternoon?

943 The position in regard to Brunei is a matter of regret, but I suggest that there may

be some advantage in it. As Brunei is a rather autocratic State, I think there would be

considerable advantage if, within a short time the democratic position in the State

could be extended so that when the Sultan decides to enter the Federation, as I have

no doubt he will decide, it will, again, be a decision of the people. We should not wish

to feel that one part of this Federation had been brought in where the wishes of the

people had not been declared.

When I was out in the East a few months ago there was much argument that this

Federation was part of the East-West manœuvre, that this was an attempt by the West

to create a state of affairs which would be another buffer to Chinese Communists. I

would suggest this is not the case. I myself believe that this is one more step in

granting independence to the peoples of our Empire, a step that was started in the days

of my noble friend Lord Attlee with the granting of independence to India and

Pakistan. It is a continuing process, and I hope it will go on. Undoubtedly it will

create stability, but I hope it will be accepted that this is not part of building of

a bloc either against the Chinese or against the Indonesians.

I must say I have some doubt about the creation of a federation. I think in this case we

should regard this as a first step in the creation of a united nation. Federations,

particularly where many races and many religions are involved, create special

problems, special strains. Where there are autonomous or semi-autonomous states in a

Federation there is a long-term risk of friction and jealousy arising. In the case of the

Federation of Malaya, of the nine states and two settlements of Penang and Malacca,

we saw a Federation but with a fairly tight central control; and we have seen, as I

think the noble Lord, Lord Ogmore, would agree, a blending and uniting together.One can hardly say that the Malayan peninsular is a federation in the usually accepted

sense of the word. It has become a united nation under its King and Prime Minister,

and this is something which I hope will take place in due course. I would not wish to

see it hurried, but I would hope that this creation of a federation is the first step.

944 There was some concern in another place on the question of religious freedom. It

is true that in Malaya it is against the law to convert a Moslem to another faith. It is







perhaps hard in Europe to understand this, but in the East it is difficult for a nation and

its religion to be separated; they are regarded rather as one. I would suggest that this is

something that we should accept. But I can say, speaking from my own personal

experience of living in Malaya for many years, that there is complete freedom of

worship, complete freedom to preach and to enroll within one's church, except, as I

say, for the bar of the Moslem religion. As the noble Marquess has said, in the case of

the states this particular religious freedom is enshrined and protected.

I think we must recognise that the economic difficulties for the Federation of Malaya

will be greater than in the past. Rubber and tin are still not what they should be. There

has been some strain, I believe, on overseas currency. They are taking on the heavy

responsibility of Borneo and Sarawak, which are in themselves not very well

developed. In the case of Singapore, they have there own problem, a large population,

massive slums, considerable unemployment; they have a very large young population,

many of them wonderful boys and girls passing examinations of G.C.E. standard, but

with very little opportunities for suitable employment. This is a great problem.

Therefore, I hope that our country and the rest of the Free World will continue to do

what they can to develop the rubber and tin trade, that they will try to bring new

industry into that country, and I believe that they will find a stability which in the past

they have perhaps thought was not there. I think the loan that was raised in London

the other day, which was very heavily over-subscribed, augurs well.

There has also been criticism that the loans and aid that the Government are making

tend to give too much prominence to military aid. I think it is right that we should

withdraw our own military forces, at least to the extent that they are required for

internal security. I myself have never thought it right when soldiers were called upon

for duty that one should be forced to 945 use British soldiers against the local

inhabitants. Therefore, I fully support the Government in this granting of aid to raise

new battalions both in Singapore and, of course, in the new states. These countries

will not be able to develop economically, they will not be able to get the investment

they need, unless there is a strong internal security position, and because of the nature

of the world and of the strains that are in South-East Asia an internal security military

force is needed apart from a strong police force.

This is an historic and, I believe, happy occasion. We turn the old chapter, a chapter for which I think, so far as we are concerned, we British who have been in South-East

Asia for many years, we need to have no regrets and no shame. We may have done

something more; we may have done something better. But I do not believe that among

my friends in Malaya, of all races, one hears of any criticism of the attitude, in

particular, of the ex-patriate civil servants. Having taken note of what the leaders have

done, I feel that we should remember the many thousands of expatriate civil servants





who, if I may say so, have given their lives to their country. I see the noble Lord, Lord

Milverton, in his place. I think he will agree that those of us who lived in Malaya had

two countries, our own in which we were born and the country in which we lived and

served; we still regarded them as home. We wish this Bill to go through to-day; there

is no question of opposition. And we look forward to seeing a happy and peaceful

Malaysia, because the people of that country deserve it.

THE MARQUESS OF LANDSDOWNE

My Lords, I beg to move that this debate be now adjourned during pleasure until two

o'clock.

§ [The Sitting was suspended at one o'clock and resumed at two o'clock.]

§ 2.0 p.m.

§ LORD COBBOLD

My Lords, I have a word or two by way of explanation, and an apology. I have a long-

standing public engagement in the country this afternoon, 946 which means that I

must be away from the House not later than 2.30 p.m. The noble Lord, Lord Ogmore,

has been good enough to suggest that I should precede him, and I am most grateful to

him. I must also ask the indulgence of the House for saying a few words, not, I hope,

controversial, on a subject with which I was closely concerned before assuming my

present duties. It is, I know, unusual for the Lord Chamberlain to intervene in debates

in this House, but in the circumstances, after speaking to the noble Viscount theLeader of the House and the noble Earl the Leader of the Opposition, I felt that this

was an occasion on which I could properly make an exception.

I have not, of course, been concerned with the later stages of the Malaysia

negotiations, and I am speaking solely from my experience up to July of last year,

when our Commission reported. I set out at considerable length last year the views

which I have formed about Malaysia. They will be familiar to those of your Lordships

who had the pertinacity to read through the Report of the Commission over which I

had the honour to preside. I will not repeat all those views now, and I wish only to

make two or three brief remarks.

Your Lordships will recollect that the main finding of our Commission was that the

Malaysia proposals would be in the best interests of North Borneo and Sarawak, and

acceptable to the majority of the population of those two territories, provided—and I

lay stress on this proviso—that adequate safeguards to meet their special needs were

included in the final agreements. Inevitably there are, after a year of negotiation, some




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minor divergencies from what seemed to us ideal a year ago. But, in general, the

constitutional arrangements now proposed for the Borneo territories follow closely the

lines which we then envisaged. And, in my judgment, the safeguards which were

pressed for by the weight of opinion in the Borneo territories in giving evidence

before our Commission, and the safeguards which we ourselves recommended in our

Report, have been substantially provided. I therefore feel able to repeat with

confidence the words which I used in our Report a year ago; that Malaysia is an

attractive and workable project and is in the best interests of the Borneo territory. It

was the unanimous opinion of 947 our Commission that, granted the necessary

safeguards, Malaysia offered better prospects, both of economic prosperity and of

security, than any alternative solution in sight.

Nobody who has studied this area and who knows this part of the world, with its

geographical, racial and religious complications; nobody who appreciates the level of

development and education in the various components of Malaysia, will underrate the

difficulties which lie ahead. Federation, of course, involves give-and-take on all sides,

and Malaysia will prove no exception to this rule. Vast problems of administration

will need to be overcome with ingenuity, perseverance and good will. It will be

necessary to strike, and to maintain, a correct balance between a strong central

government and a high degree of local autonomy. Without strong central authority the

different territories cannot be welded into one organism, with a national unity and

with the vitality to withstand hostile pressures from outside. But an attempt to carry

out day-to-day administration in Jesselton or Kuching from Kuala Lumpur, or to

submerge the character of the Borneo territories, would only court failure. There are

refreshing signs that these requirements are clearly understood. I would add mytribute to that paid by the noble Marquess and the noble Lord who spoke for the

Opposition to the statesmanship which has been shown in these negotiations by all the

political leaders involved, and in particular to the great vision and determination

shown by the Prime Minister of Malaya.

I should like to draw your Lordships' attention to one particular phrase which I used in

the concluding paragraphs of our Report: It is a necessary condition that, from the

outset, Malaysia should be regarded by all concerned as an association of partners,

combining in the common interest to create a new nation, but retaining their own

individualities. I took leave in the Report to recommend that in the forthcomingnegotiations Governments should pay close attention to that point, both in its

psychological and in its practical aspects. I take leave once again to express the

earnest hope that this same point will be in the forefront of the minds of all those who

have the task of guiding the Federation in its formative years.





948 There has been some criticism of the haste with which all this has been done. It is

certainly true that the Parliamentary procedures have been a bit rushed, though one

can see the reasons why it had to be so. On the main issue I would not agree that

things have been unduly hurried. This is no new idea. I remember myself discussing

this question with friends in that part of the world as long, ago as the early 1950s. And

in the last two years, as the noble Marquess has outlined in his speech, there has been

a continuous process of consultation, explanation and negotiation. In my view, a long

period of indecision would only have given further scope for agitation and for hostile

pressures from within and from without.

In the months which I spent up and down the rivers of Sarawak and from coast to

coast in North Borneo I came to have a very deep affection for the peoples of those

territories. Everybody who knows those people will wish them well in this exciting

venture. I commend this Bill to your Lordships, and I hope that this House will give

firm support to the proposals for a Federation of Malaysia.

§ 2.8 p.m.

§ LORD OGMORE

My Lords, I, too, welcome this Bill, and I was very glad that the noble Lord, Lord

Cobbold, who has had such recent experience in this particular area, spoke as he did. I

think he made some very wise observations on the balance that will be needed to be

preserved between the rural areas of Borneo and the more advanced areas such as

Singapore and parts of Malaya. I thought the noble Marquess introduced the Bill in a

somewhat cavalier manner. I know that many of these Bills are rather technical, but Ihave never before heard any Minister dismiss it completely and say that he did not

propose to discuss the contents of it. There are certain of the contents which are of

great importance, such as those dealing with citizenship, and so on. No doubt many of

your Lordships will follow his example and will not discuss the Bill very much. It has,

in any case, been rushed through at the end of the Session, and even if anybody had

wanted to put down any Amendments—and I do not believe anybody will want to do

so—there would not have been the opportunity.

949 I know that the reason for rushing the Bill through both Houses is because the

Federation is to come into existence an August 31; otherwise I should be inclined to

agree with the noble Lord, Lord Shepherd, that such an historic Bill deserves a better

Parliamentary occasion—which means better Parliamentary time—than this one is

getting. We know how much time we rightly spend on our own affairs, but I have

always felt, since I have been in Parliament, that it is a pity that many of the very

important Bills relating to the Commonwealth are generally put in at a time when, to

say the least, there is not a big House. They always seem either to be on a Friday




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morning or on the occasion of a Royal Garden Party, and that is a pity. However,

those who speak do so with knowledge and with great sympathy; perhaps that makes

up for the small House so far as attendance is concerned.

As this is possibly the last occasion on which we shall have an opportunity of

discussing at any length the problems of Malaya, since the territory of Malaysia will be independent on August 31, and we do not normally discuss the affairs of

independent countries in this House, perhaps I may be allowed to say a word or two

about a man whom I consider to be a really great man of our time, the father, to a

large extent, both of Malaya and of Malaysia. I refer to Tunku Abdul Rahman. I first

met him 32 or 33 years ago. I was practising at that time in the Settlement of Penang. I

corrected the noble Lord, Lord Shepherd, who described Penang as a protectorate; it

was, of course, the oldest British settlement in the Far East. The Tunku at that time

was an assistant district officer, just over the frontier; in his father's State of Kedah.

We have been great friends ever since, and I have seen the growth of this remarkable

man into the great leader and father figure that he is at the moment and will, I hope,

continue to be.

So far as Sarawak is concerned, I should like just to recall to the House the memory of

the late Sir David Gammans, who was very much interested in all these problems of

South-East Asia. He served in Malaya for years, and, in the early part of 1946, he and

I were sent out by the then Government of this country to advise on the desirability of

the secession 950 of Sarawak from Rajah Brooke—the White Rajah as he was called

—to His late Majesty the King. We had a very interesting tour of the country at that

time, which was made possible—as it was only just immediately after the war—by the

kindness of the noble and gallant Earl, Lord Mountbatten of Burma, who at that time

was Supreme Commander in the Far East, in placing a naval vessel at our disposal.

One point that I think is not often realised, is how much success there has been in

Malaya in inter-racial harmony. I do not know of any country in the world other than

Malaya where, as it were, the immigrant population, or at least the population of

descendants of immigrants, is almost equal to the indigenous population. There are

Chinese, Malays and, of course, a very large population of Indians. Throughout these

years there has been this very happy relationship at a time when in the rest of the

world it seemed almost impossible for the people of different races and religions toget on well together in one country. In Malaya, however, they have all settled down

and worked for the prosperity of the country and for their own prosperity in an

exceedingly amiable way.

We must pay tribute not only to the Tunku, who I think is most responsible for that

harmony, but also to Tun Abdul Razak, Mr. Tan Siew Sin, Mr. Lee Kuan Yew, to

whom the noble Marquess paid due and proper tribute, and to Mr. V. T. Sambanthan,





the Leader of the Indian Congress in Malaya. Like the noble Lord, Lord Shepherd, I,

too, wish to congratulate Malaya on the success of the £5 million issue of Federation

of Malaya 6½ per cent. stock, which was oversubscribed within one minute of the

stock opening. That, I think, is a very good indication of the strength of Malaya in the

financial market, in the City. It shows what the City of London thinks of Malaya, and

also of the future of this territory—a very handsome tribute; and I congratulate

Malaya, and particularly the Governor of the Bank Negara, the State Bank of Malaya.

We must not suppose that this is the last we shall see of Malaya. I hope that our

associations with Malaysia will be long-continuing and as close as they have always

been in amity, friendship, and also 951 in co-operation. There is still a considerable

need for aid and trade with this area, as with many others. North Borneo (or Sabah, as

we now call it) and Sarawak will certainly need a tremendous amount of help from

Her Majesty's Government in the years to come. They are, in many respects, of

course, developing—to use the polite expression we use nowadays; they are

underdeveloped. They are a very small population spread over this considerable area

of Borneo; and it is our duty, and I hope it will be our pleasure, to do everything we

can for them. We shall be much aided, as I said yesterday when speaking on

the Rhodesia and Nyasaland Bill, by the determination of President Kennedy to make

adequate provision, or to agree to join in making adequate provision, for the growth of

international liquidity to expand world trade over the years ahead. This determination

of the President is a highly important statement, and, of course, will help

tremendously the economies of the underdeveloped nations.

In Borneo, I think that more than anything they will need smallholder schemes. They

are also going on with smallholder schemes in Malaya, where I know the Tunku and

Tun Razak are particularly interested in these features. But in Borneo they will also

need them. It will be a great part of their economy to get the rural areas prosperous,

and that is the best way of doing it. Many areas, such as in Singapore and other parts,

will need more light industry, and there, too, we can help. Singapore, Kuala Lumpur

and Hong Kong (which is not in this, but which I mention because it has some of the

same problems as these other cities) can give us a great lead, and show an example to

us in housing. When I hear of the difficulties of housing a few thousand immigrants in

Paddington and in North Kensington, it seems very odd to me when one realises the

way in which Hong Kong and Singapore manage to house their people. Take HongKong, with the hundreds of thousands of immigrants they have had in the last few

years. They put the houses and the flats up. In Hong Kong, they even build flatted

factories, which means that factories are built on the flat principle, because land is so

scarce. They have all sorts of ideas in these countries which we could adopt here. The

traffic should not be one 952 way by any means. In housing and in the provision of

factories, and that sort of thing, Singapore, Kuala Lumpur and Hong Kong can teach


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us a tremendous lot; and I would suggest to Sir Keith Joseph that in the very long

Recess we are going to have he pays a visit to Singapore and Hong Kong, and perhaps

Kuala Lumpur, to see how they house their people in congested areas—and he will

have a surprise.

So far as trade is concerned, it is very important that we take the products. I said thisyesterday, and I say it again to-day: we must take the products of these countries as

soon as any of these countries, any of these cities, begins producing anything.

Whenever they produce anything, even with money provided by us, there is almost

immediately a howl from over here and an immediate demand for a tariff, a barrier, or

for some sort of quota. Even this week in this House, on the Finance Bill, Members

from both sides were moaning about imports from Hong Kong. What does the

Commonwealth mean unless we can help them by taking their products? What is the

good of trying to help developing countries unless we take their goods when they

make them?

The World Bank has just made an interesting Report on Malaysia and it said that the

creation of a common market in the new Federation of Malaysia is "highly desirable"

and will give a powerful stimulus to industrial growth, but special arrangements will

be needed to protect the entrepôt trade of Singapore and Penang. I am certain that the

Government of Malaysia will look at this Report carefully and will have regard to the

entrepôt trade—and particularly that of Singapore—because this trade is very

important; and I see no reason why, through bonded warehouses and so on, it could

not be combined, even though a common market is established.

I was interested to hear what the noble Marquess said about Brunei. I am sorry, as he

is, that Brunei is not part of the new Malaysia; but I think it was right not to bring

undue pressure in that direction. In time it will come in, but it is a matter for the

Government of Brunei to decide. I see that in a statement the other day the Sultan of

Brunei said that he required certain assurances about external defence and internal

security. That is a problem for this country; 953 because Brunei will still be in Treaty

relations and will still be a Protected State of Great Britain, and presumably Her

Majesty's Government will have some responsibility for external defence and internal

security. But that is a matter upon which I shall not expand at this moment. We must,

however, bear in mind that we are not at this moment leaving all these problems in thehands of the new Malaysia. This is one that will remain with us.

The great question mark in this part of the world is Indonesia. In fact, President

Sukarno seems to be following the example of a predecessor of his in an inland sea,

Mussolini; because he has now described what used to be called the Indian Ocean as

the "Indonesian Ocean". It is rather bold of him to call it the Indonesian Ocean. He is

reputed to be extremely angry about Malaysia on two grounds; first, because he did

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not believe it would come into being and that the Governments concerned would

agree to it; and, secondly, because he has to placate his Communist wing—and there

are quite large numbers of Communists in Indonesia. I trust that Indonesia will not do

anything foolish but will retain friendly relations with Malaysia. It would be most

unfortunate if any trouble were to be caused in that part of the world. At the same

time, I am quite sure that the new Malaysia cannot do other than take steps to protect

themselves, in view of the sort of speeches made by President Sukarno and others.

This means that, so far as Borneo is concerned, there must be adequate forces

guarding the very long frontiers, all of which go through jungles and across mountains

tops. That is best done—and I am glad to see that the new Malaysia is prepared to do

it—by irregular forces. The Iban and other tribes of Borneo make extremely good

irregular troops, and it will be cheaper, and far more efficient, to enlist forces of this

kind to contend with the long frontiers that run down the whole length of this

enormous Island of Borneo.

As to the other part of Malaysia, it will have to retain light naval forces and perhaps

add to them, and also an Air Force. We must remember that in Malaysia there is part

of the Common- 954 wealth Brigade Reserve, so that altogether there will be quite a

satisfactory number of forces of the conventional type, though it is unfortunate that a

new venture like this should have to spend an appreciable part of its income on

defence when there are so many other items of development and social service on

which I am sure they would rather spend the money. I think it would be highly

dangerous to neglect altogether the necessity of having forces in this area of a kind

adequate to secure its defence. Recently off the North of Borneo there has been a

certain amount of piracy. The pirates have been coming from various places, which

there is no need to name at the moment, and, though not on a large scale, they have

been a bit of a pest. The best means of combating this piracy are light naval forces and

aircraft to spot the pirates as they leave their lairs to prey on the traffic in the North

Borneo area.

On behalf of my Party and on my own behalf, I most sincerely wish this wonderful

new venture every possible success. Before I conclude, I would express my thanks

and my Party's thanks to the noble Marquess for the efforts he has put in, both in

South-East Asia and here, to bring this about, and also to the staff of the ColonialOffice, who have worked extremely hard in this field. I hope within the next six

months, God willing, that my wife and I will be making an extensive tour of the

Federation and Borneo, and it will be a great joy to us to go back again to Penang,

where we spent the first years of our married life over thirty years ago, and meet many

old friends, both in Penang and elsewhere in the Federation. It is a lovely land, with a





most interesting and remarkable people, and I am very proud to have been able to

speak to-day in your Lordships' House and commend this Bill to your Lordships.

§ 2.28 p.m.

THE LORD BISHOP OF LEICESTER

My Lords, I am quite sure that your Lordships would have wished that any words

from this Bench to-day might have come from my right reverend friend the Lord

Bishop of Birmingham, who has such wide experience of this area, but in his quite

unavoidable absence I am afraid your Lordships will have to endure a few words from

me. I feel I must apologise to the House for addressing it no fewer 955 than three

times on varied subjects about which my knowledge is also very varied.

It is a fact that Christian opinion in this country has welcomed the establishment of

the Federation of Malaysia, in the belief that it will make for stability and prosperityin the area as a whole. In building up the bonds between the different races within this

vast geographical area, an essential element is the building up of confidence in every

part of the community, confidence that every part will be able to develop its life in

freedom. The Christian community in Singapore, as in North Borneo and Sarawak, is

among those groups which make a valuable contribution to the life of the community.

It is therefore important that they should be able to give the Federation their full

support and work wholeheartedly for its success. For this to be the case, they must not

feel that there is a continual threat hanging over them concerning freedom to practise

their religion, which must include the preaching of the Gospel in which they believe.

For this reason, Christian opinion both in the Borneo States and in this country has

welcomed, in particular, the provision of Article 161 D of the new Constitution, which

reads as follows. Notwithstanding Clause 4 of Article 11, there may be included in the

Constitution of a Borneo State provision that an enactment of the State Legislature

controlling or restricting the propagation of any religious doctrine or belief among

persons professing the Muslim religion shall not be passed unless it is agreed to in the

Legislative Assembly on second or third reading or on both by a specified majority,

not being a majority greater than two thirds of the total number of members of the

Assembly. That provision has already been referred to by the noble Marquess, Lord

Lansdowne, and by the noble Lord, Lord Shepherd. This, however, does not cover the

position in Singapore. For there the existing provisions of the Federation of Malaya

will apply without any such entrenched constitutional safeguards as will be enjoyed

by the Borneo States.

These provisions are essentially two. By virtue of Article 3: Islam is the religion of the

Federation; but other religions may be practised in peace and harmony. In Article 11 it







is laid down: Every person has the right to profess and practise his religion and,

subject to Clause 4, to propagate it. 956 It is to Clause 4 that Article 161 D refers, and

it reads as follows: State law may control or restrict the propagation of any religious

doctrine or belief among persons professing the Muslim religion. With such a

provision everything turns on the manner in which it is implemented. It has been the

implementation of it which has given rise to some difficulties for the missionary work

of the Christian church in Penang and Malacca, following the passage of the Muslim

Law Enactment Bills in those States. In consequence, the Council of Churches in

Singapore expressed fears concerning the introduction of similar legislation in the

future in Singapore. As the Christian community forms only 3 per cent. of the

Singapore population, no entrenched constitutional clause could meet this case. It

therefore seems all the more essential to obtain, if possible, from the Singapore

Government some declaration of intent.

For this purpose the application of the British Council of Churches, led by the Bishop

of Birmingham, waited upon the Prime Minister of Singapore during the recent

Constitutional Conference in London. The Prime Minister was asked whether, on his

return to Singapore, he would reaffirm publicly that it was the intention of his

Government to pursue a policy of religious toleration, and that there was no intention

of introducing legislation to control or restrict the propagation of any religious

doctrine or belief; that the status quo in matters of religious liberty would be

maintained, and that it would be the wish of his Government that there should be no

difference in the way this was interpreted in practice between Singapore and the

Borneo territories.

The Prime Minister, Mr. Lee Kuan Yew, showed full understanding of the position

and undertook to make a declaration concerning this issue in the light of the

representations which had been made to him. This is much to be welcomed, and

although Her Majesty's Government no longer bear responsibility in these matters, I

would express the hope that the United Kingdom representative in Singapore will

continue to show interest and concern for these important issues of religious liberty. It

will obviously be necessary to recognise beyond all possible doubt the complete

independence of the country in which he is stationed. 957 He will pay full attention,

obviously, to the particular need of Muslim communities, to which wise reference was

made by the noble Lord, Lord Shepherd. But it is to be hoped that as a representativeof this country he would never forget what we have tried to maintain and to spread in

the world in the way of religious liberty, and will believe that this is something for

which all nations of the world should eventually be grateful.

§ 2.36 p.m.

§ LORD MILVERTON





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My Lords, I should like to begirt what I have to say in a brief intervention in this

debate, by expressing my admiration to the noble Marquess for the way in which be

introduced the Second Reading of this Bill. It seems to me to-day that I have had the

privilege of listening to what I would consider, with my usual arrogance of judgment,

to be an ideal introduction to the Second Reading of a Bill, and an ideal speech from

the Opposition Front Bench, which in this case, of course, is not in opposition to but

in approval of the Bill. What I mean by that is that all the facts of the situation and

What led up to the Bill were so well and so lucidly explained that there was nothing

more that needed to be said on that line, and the speech from the representative of the

Opposition Front Bench dealt in a wide and statesmanlike manner with the problems

which confronted the new nation. It was informed in this case by a wide personal

knowledge of the countryside and the people of whom he was talking. That, of course,

frees somebody like myself from the necessity of repeating or going over ground

which has already been so well covered.

So in rising to give an unqualified support to this Bill, I hope your Lordships will

forgive a certain reminiscent and nostalgic tone in my remarks. I am one of the happy

band of pilgrims who knew and loved the Malay States and remember them as a

country where Malays, Chinese, Indians and Europeans lived in mutual amity, and we

indeed who know that country can say, Et ego in Arcadia vixi. The Malay States,

federated and unfederated, the Straits Settlements and the Borneo territories from

1908 to 1933 were my second home, as the noble Lord, Lord Shepherd, has already

mentioned. I served for 25 years in Malaysia, and I was married 958 in Kuala Lumpur

when I was Under-Secretary to the Government there in 1927. So with an intimate,

personal knowledge of all the Malay States as well as Penang, Malacca, Singapore, North Borneo, Brunei, Sarawak and Labuan, it is difficult for me to express

adequately my appreciation of the statesmanship of Tunku Abdul Rahman and Lee

Kuan Yew and their colleagues in bringing about this Federation.

The basic idea, of course, as has already been said, is not new. For many of us it is a

dream come true. Thirty years ago, when I was serving as Governor of North Borneo,

having been lent by the Colonial Office (perhaps as the person they could best spare)

to the last of the chartered companies as their Governor, I remember an attempt we

made to effect a union with Malaya, which ultimately failed because it did not win the

approval of London. It was premature and it left out Sarawak, which, at that time, wasan anachronism under the Brooke family next door to an anomaly under the chartered

company with me as its Governor. In those days we dreamed of a greater Malaya,

such as this Federation envisages, which would develop to the benefit of all its

constituent parts and work in amity with its great neighbour, now the Republic of

Indonesia. That would have been a largely Moslem bloc linking South-East Asia with






the Pacific. Of course, we did not foresee at that time the problems which would

overshadow that sort of dream.

I had a geographical vision of Malaya and Indonesia in the shape of a rather

outstretched hand linking South-East Asia with the Pacific. I happen to know the area

at both ends very well because I was, at a later period, the Governor of Fiji and HighCommissioner for the Western Pacific, where one looks north towards the Solomon

Islands and the Gilbert and Ellice Islands up to Malaya, and east across the Pacific

even to Pitcairn; and one was in charge of the islands scattered over 2 million square

miles of sea, all of which have a kind of human sympathy with the people of Malaya.

In the dim and distant future perhaps that, not so much a Federation as a mutual

agreement will stretch even as widely as that. But events have moved in a different

direction and one may 959 still hope that the Indonesian Government of to-day will

modify its rather hostile suspicions and recognise the benefits which will accrue to

Bornean territories.

I am familiar, too, with the basis of the Philippine claim to North Borneo territory,

based on an old nebulous claim of the Sultan of Sulu to a somewhat piratical

hegemony which he and his predecessors claim to exercise, although the claim had

very little substance in reality. But I do not wish to detain your Lordships with these

memories. I am convinced that the linking of North Borneo and Sarawak with Malaya

will be of great economic benefit to all the people of those two countries and, in

modern circumstances, will give cooperative security against Communist advance. It

will also render possible a comprehensive development plan for the Bornean States

and will afford a guarantee against infectious influences front Communist sources in

neighbouring countries.

It is a matter of deep regret, of course, that the Sultan of Brunei has been unable to

associate his country at present with the Federation, but I am also confident that the

early future and the natural tendency of his geographical position will bring Brunei

into the Federation on terms which, I am sure, will ultimately satisfy His Highness

and his people. The union of Singapore with the Federation of Malaya was, and is,

obviously beneficial as a step for both countries, politically and economically.

Singapore in days gone by always was part of the same country, and politically and

economically their trade is so interlocked that the need of unified financial planningand economical operation is too obvious to need any stressing by me. It is interesting

to note that the World Bank is already recommending and ready to support a scheme

for the creation of a common market for the Federation of Malaysia, a scheme which

would reconcile the interests of the entrepôt trade of the great free port of Singapore

with the agricultural and mining and growing industrial economy of the Malay States.





So, my Lords, the foundation of this new State will carry our warmest good wishes.

There are two Malay proverbs which occur to me in this connection and 960 which

may perhaps appeal to the noble Lord, Lord Shepherd, if not to others of your

Lordships. The first of them is: "Tali yang banyak lembar-nya ta'senang putus", which

being translated means: A rope of many strands is not easily broken".The other one,

which the Malays are doubtless applying to this situation is: Kalau pokok banyak

akar-nya, lagi tegoh, apa di-Takutkan ribut", which also being translated means: If a

tree has roots, many and firm, it need not fear a tempest. In conclusion, those of us

who know the countries of Malaysia so well may echo the sentiment behind Kipling's

famous words about India: I have eaten your bread and salt, I have drunk your water

and wine, The deaths ye died I have watched beside, And the lives that ye led were

mine. Was there aught that I did not share In vigil or toil or ease, One joy or woe that I

did not know, Dear hearts across the seas? My Lords, we give our most hearty support

to the Second Reading of this Bill.

§ 2.48 p.m.

§ LORD TWINING

My Lords, I propose to confine myself to some remarks on North Borneo, where I had

the honour to serve as the first Governor appointed by the Crown when it became a

Crown Colony in 1946. Although I know that numbers of your Lordships are familiar

with the affairs of that territory and several have visited it in recent years, it is a

subject which has been neglected in your Lordships' House. I have done some

research in Hansard, and between 1946 and 1961, when the first mention of the idea

of a Federation of Malaysia was made, I have been able to find only two references to

North Borneo. One was in 1951 in connection with a project of the C.D.C., and the

other in 1958 when it was mentioned that his Royal Highness the Duke of Edinburgh

would be visiting the Colony. The reason for this apparent neglect was probably that

the affairs of the Colony were going smoothly and that the reconstruction and

development plans were proceeding satisfactorily. If your Lordships will be good

enough to forbear with me I should like to say something about this delightful

country, and I hope my remarks may facilitate the appraisal 961 of our responsibility

towards the people of North Borneo.

From 1882 to 1942 the country was administered by the British North Borneo

Chartered Company, having been ceded by the Sultans of Brunei and Sulu. I should

like to pay tribute to the work done by the Chartered Company. Its resources were

slender, but it did a great deal to develop the country and to provide it with a good

administration. The officers of the company were recruited quite differently from

those of the Colonial Service, but they managed to build up a fine esprit de corps, and,

to their great credit, they gained the trust and affection of the people. In my




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experience, I have not found anywhere such good race relations as existed there. The

policy was not multi-racial but non-racial, and though the staff was thin on the ground

—Parkinson's law was not applicable to North Borneo at that time—they gave most

devoted service, and many of them elected to stay on when the administration was

transferred to the Colonial Office in 1946. They have made a considerable

contribution to the recovery of the country since the war, especially by providing

continuity to the good human relations which have been such a source of strength in

the history of our administration there.

In 1942, when we were in no position to defend it, North Borneo was occupied by the

Japanese. The territory was surrendered without a shot being fired. The European

officials, traders and missionaries were interned and suffered great hardship. The

native population, although dismayed, accepted the position as best they could, and

many of them showed great courage in doing what they could to alleviate the

conditions of their former masters. The Japanese administration was most rigorous

and severe, and as time went on the position of the people became almost intolerable.

In 1944, the occupying forces administered a devastating blow by the mass execution

of all the intelligentsia on whom they could lay their hands. Several thousands

perished.

In 1945 the tide of the fortunes of war turned and the. Japanese occupying forces

came under strong Allied attacks. It was considered necessary to subject the important

centres to aerial bombardment and the towns were completely destroyed and

communications disrupted. 962 Allied forces were landed, and after hard fighting the

country was liberated. I have always felt that the fact that the enemy was physically

defeated on the ground had a great psychological effect on the people, which was

manifested in their subsequent attitude towards us. The people gave their liberators a

great welcome. They accepted the change to Crown Colony status, and, despite the

pitiable conditions—the majority were without housing, clothing or personal

possessions, and money and even foodstuffs were in short supply—they got down to

the restoration of their country with determination and a splendid spirit. Their trust in

the British was unbounded, and this made the task of the Administration, which was

of great magnitude, much the lighter.

In the immediate post-war period North Borneo, like the whole of South-East Asia,was saved from famine by the organisation of the Special Commissioner for South-

East Asia, under the noble Lord, Lord Killearn, who ensured that each territory in the

area received a fair share of the limited supplies of rice and other primary foodstuffs

which were available. The gratitude of the people of North Borneo was unmistakable.

The task of the British Administration was indeed formidable. We literally had to start

from scratch. Everything was in short supply—money, materials and technical staff.





The damage that had to be made good was valued at many millions of pounds.

Despite the strongest representations and the sympathetic attitude of the Colonial

Office, the funds that the British Government provided for rehabilitation were quite

inadequate and at the time I thought ungenerous. True, the situation in the United

Kingdom was difficult; but we had been responsible for the devastation and we were

also responsible for the welfare of the people. But there was no complaint; only a

realisation that Great Britain, despite its own enormous problems, was doing what it

could. Unlike an attitude which I have found in some other places where financial

assistance has sometimes been regarded, if not as a right, at least as fortuitous—in one

place I was in it was known as "pennies from heaven", an attitude that tended to soften

the moral fibre of the963 people—the population of North Borneo set to work with a

will and toiled hard, whether at rebuilding or at cultivation. They lived thriftily and

used their savings to re-establish their homes.

We had the pleasure of a visit from the noble Earl, Lord Listowel, who was Minister

of State for the Colonies. He may remember inquiring from me whether we had been

able to establish a 48-hour week. I had to reply that many people, especially the

Chinese, seemed to be working a 148-hour week and no power on earth could stop

them. The results were staggering and the country rapidly made a wonderful recovery.

It was an outstanding example of what self-help can do.

I have tried to give a brief survey of the story of North Borneo in recent times, so that

your Lordships may appreciate the great qualities of the people who inhabit it. In their

eyes, at least, the British Administration has discharged its responsibilities to their

satisfaction. It is against this background that we must consider the proposal for

including North Borneo in the Federation of Malaysia. The total area of North Borneo

is some 30,000 square miles, or about the size of Ireland. It is a mountainous country,

and over 23,000 square miles, or 80 per cent. of the land area, is covered with forests,

of which about 10,000 square miles is known to be productive or potentially

productive. Some 200 miles of the southern border is contiguous with the Kalimantan,

the former Dutch Borneo, which is now part of the Republic of Indonesia. The nature

of the terrain along this border is very broken, and the fact that there is a deep belt of

impenetrable forest makes communications by land between the two territories very

difficult—in fact, limited to a few jungle tracks.

To the north and east there is an archipelago which is part of the Philippines. Many of

the islands are scarcely administered, which makes the North Borneo seas susceptible

to piracy which even to-day is endemic, and, despite the assistance given by the Royal

Navy, is difficult to deal with. Except in the West, the hinterland is populated only in

a series of enclaves served by seven ports. The population is only 450,000, or 16 to

the square mile, and 964 of these some 300,000 can be described as indigenous people







—the Dusans, the Bajaos and the Muruts. There are about 105,000 Chinese and

45,000 others, including 2,000 Europeans.

The paucity of population has been an important factor in restricting the pace of

economic development. In the days of the Chartered Company the immigration of

Chinese was encouraged, and certainly these immigrants have played a big part in theeconomy of the country and have settled down as good citizens. There has been

constant pressure on the Government to encourage immigration from other places,

such as Timor. Owing to the shortage of skilled labour an agreement has been made

with the Hong Kong Government to permit the recruitment of skilled men, who are

allowed to settle in North Borneo with their families. The indigenous people are very

concerned about the immigration of workers on a large scale, and fear that if it is

allowed to continue they will be left as a minority among foreigners. It is a matter on

which they want assurances and safeguards.

Economically, the country is potentially rich and the exports are running at about £30million per annum, or some £60 per head of the population. The principal exports are

timber, rubber, copra and hemp; and in recent years the Commonwealth Development

Corporation have been playing a useful part in the development of export crops. But

the economy is capable of diversification, and the list of exports contains a unique and

fascinating number of exotic items which is characteristic of a country which has been

called by the romantic name of "the Land Below the Wind". Among these we find the

outer wrapper leaf of the cigar; cutch—which is an extract used for tanning, the

preservation of fishing nets, the coloration of whisky and beer and as an ingredient of

lung tonic. Then there are birds' nests and sharks' fins which are delectable items in

the Chinese cuisine. We also find dragon's blood (whose trade name is damar) rhino

horns, armadillo scales and, most bizarre of all, the gall stones of honey bears. The

noble Lord, Lora Ogmore, suggested that we might take more of the products from

Malaysia. Perhaps we might try to sample some of these. I have mentioned these,

although they may be oddities, not only because 965 they make a valuable

contribution to the livelihood of many people, but because I think they are

characteristic of the way of life in North Borneo.

Although taxation is not unduly burdensome, the budget is regularly in balance at

round about £8 million per annum, and 25 per cent. of the revenue is devoted to thecapital development plan. The indigenous population naturally fear that if they are

under control from the mainland the potential wealth will be exploited by outsiders

and that they will be subjected to higher taxation.

Finally, I must refer to the political aspect of the proposed Federation. Until recently

there has been little or no political activity. When North Borneo became a Crown

Colony it was the policy of Government to take all possible steps to associate the





people more closely with the affairs of Government. Marked progress has been made

with the development of local government institutions, but the progress at the centre

has been slower. To-day there is a Legislature with eight officials and ten unofficial

members, but there are no elections. This may seem to be rather old-fashioned, but it

must be remembered that at the end of the war practically the whole of the educated

class had been annihilated, all the school buildings had been destroyed, and most of

the school teachers had been murdered. A new start had to be made and progress was

inevitably slow. Even to-day there are under 4,500 boys and girls in secondary

schools. Moreover, the people were so preoccupied in the work of rehabilitation that

they had little time or inclination to devote to public affairs. They were content to

leave this to the administration. But things are changing and the pace is quickening.

The proposal for the inclusion of the country in the Federation of Malaysia not only

aroused interest and concern but stimulated political activity.

These proposals, as we have heard, are not altogether new. I recollect that even in

1947 consideration was given as to what steps could be taken to bring the three

Borneo territories into closer association with Singapore and Malaya, with which they

already had special relationships. There had, in fact, always been close links with the

mainland territories under British administration. Labuan, for instance, which was

incorporated in North Borneo in 1947, had been a depen 966 dency of Malaya before

the war. When, in May, 1961, Tunku Abdul Rahman, the Prime Minister of Malaya,

publicly put forward a proposal for a Federation of Malayasia to include the Borneo

territories, the initial reaction was one of shock tempered with suspicion and anxiety.

In these days when we are acceding to popular demands for granting our colonies

independence, Her Majesty's Government must have found themselves in a dilemma

with regard to the Borneo territories, because the normal democratic ways of

ascertaining the views of the population were not available. The fact that there were

no elections made it difficult to appraise the true feelings of the people. It was for this

reason that Her Majesty's Government appointed the Commission under the

chairmanship of the noble Lord, Lord Cobbold, to ascertain the views of the people of

North Borneo and Sarawak on this question and, in the light of that assessment, to

make recommendations. This was a somewhat unusual method to employ, but

probably the best in the circumstances. The assessment of the Commission was that

about two-thirds of the population were either strongly in favour of the proposal or, atleast, not against it, provided that there were adequate safeguards.

Despite some doubts, I find myself able to support the conclusions of the Cobbold

Commission. I am convinced that the idea of a Federation of Greater Malaya is

ultimately the right one, but it is a question of timing. The majority of the people

would have preferred to see this step deferred for a period of ten years or so; but if we





let this opportunity go by default, it might not recur. It is therefore expedient that we

should abdicate our responsibilities now. I am convinced that, in the long run, it will

be in the best interests of the people of North Borneo. It has been made clear to the

people that they cannot continue to be under British rule for ever, and I believe that

they are willing to accept our advice that this proposal will be beneficial for their

future welfare.

The agreement between Her Majesty's Government and the Governments of the

component parts of the proposed Federation has been most carefully drafted, and

includes reasonable safeguards. I have already mentioned that the people

have 967 certain fears, especially about the danger of being swamped with immigrants

and exploited by outsiders. They also have anxieties about religion, about which we

have heard. Nearly one-third of the people of North Borneo practise the Moslem faith,

while some 17 per cent. are Christians. The remainder are either pagans or the

followers of other religions. Under British rule, they have enjoyed religious freedom,

and they naturally want this to continue. In supporting the policy of Her Majesty's

Government, I should like to express my best wishes to the people of Sabah, as the

new State of North Borneo is to be called, for whom I have a sincere and lasting

regard. I am sure that, with their great qualities and good sense, they can make a great

success of their future.

§ 3.7 p.m.

§ LORD GRANTCHESTER

My Lords, like my noble friend Lord Ogmore I would say a word of welcome to therulers and people of the new Federation of Malaysia, and congratulate Her Majesty's

Government, and particularly the noble Marquess, Lord Lansdowne, and the noble

Lord, Lord Cobbold, on the completion of a task which has been no easy one. The

new Federation brings together peoples whose homes are in a wide and scattered

region, and, as we have heard, peoples of varied racial origin and religions.

Federations are notoriously difficult to work. Above all, the Government of a

Federation is called upon to exercise restraint and to show tolerance to its constituent

parts. I should like to join in wishing the new Federation well, and a long and happy

existence. Although I regret that I have not yet been able to visit this area, I have very

much enjoyed the company and, I believe, the confidence, of many of its

representatives and students. With them, I have taken an interest in following the

developments which have led to this Bill.

I have only one regret, and it is upon this that I wish to say a few words which I hope

all concerned may find helpful. It is a regret which, as the noble Marquess, Lord

Lansdowne, has said, is shared by Her Majesty's Government: that the Sultan of




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Brunei has not found it possible to join the Federation. Some two years ago the Sultan

flattered me 968 by wishing to know my opinion of the proposals which were then

coming under discussion. I listened to the understandable fears of the many students

who were in this country, and who were looking forward, as soon as they became

qualified, to taking up positions of responsibility in their home State. They felt that

developments were coming too fast for them, and hoped, as they told me, that we, the

British, would not abandon them before they had more locally-born trained

administrators to take over. Although I did not feel competent to offer advice (because

I had not studied the problems on the spot) I said that it seemed to me that Brunei

would be well advised to join an area Federation, provided they secured the necessary

safeguards so that the wishes of the Brunei community were respected.

In some ways Brunei is a lucky community. It has a small population, and during the

last ten years has enjoyed a large income derived from the development of its natural

resources. These, however, are not inexhaustible and certainly cannot be counted upon

to last for ever. Diversification is almost nonexistent.

I have had the opportunity of some long and frank discussions with His Highness

since he decided, with the support and advice of the Brunei delegation, that he was

unable to join the Federation. The Sultan in these talks with me paid tribute—and I

believe all noble Lords will appreciate the spontaneous expression of his feeling—to

the understanding that successive British Governments have shown to the people of

Brunei during the protectorate. He also paid tribute to the patience and fairness which,

he told me, the noble Marquess had shown during the negotiations.

It was, I think, in 1959 that His Highness made over to his people the considerable

personal revenue he had enjoyed, reserving for himself and his wife only a modest

allowance. In 1961, when federation was first mooted, Her Majesty's Government,

were aware, I think, that the people of Brunei were rather reserved in their attitude,

and that it would not be possible for Brunei to join the Federation unless the Sultan

could assure his people that they would be fully safeguarded. At that time His

Highness believed that it would be possible 969 to do this. I feel that a visit and study

by the noble Lord, Lord Cobbold, when he went to Malaya, would have been useful

and helpful, and I believe that the failure of Brunei to invite him and his colleagues

was a great pity.

His Highness is anxious that the reasons for the decision of Brunei not to join the

Federation at present should be fully understood. I feel that I cannot do better than

refer to the statement issued by the Brunei delegation announcing their decision on

July 8 last; and, with your Lordships' permission, I will read the relevant short

paragraphs. The statement says: To-day the Government of the Federation of Malaya

have informed the Brunei delegation that they now find themselves in a position







where they are unable to give effect to terms previously agreed or to assurances

repeatedly given. In these circumstances, His Highness and his Government are left in

doubt of the ability of the Government of the Federation of Malaya at the present time

to give effect to the negotiated terms governing the entry of Brunei into Malaysia.

They are unable, therefore, to take part in the signing of the Malaysian

agreements. Reading between the lines of this statement, it is obvious that an

unfortunate lack of confidence had crept into the minds of the Brunei delegation.

Confidence is as important as a Constitution, for suspicion can wreck the mutual

respect which is necessary between those who are to work together.

While I was trying to understand what went wrong, His Highness invited me to study

a number of documents. I do not think that it would help the cause of Brunei, or of the

new Federation, to say more about these documents than that I satisfied myself that

they contained a number of suggestions and statements which, however well-

intentioned, were capable of being misunderstood, and that they were, in fact,

misunderstood in Brunei. Unfortunately, such things happen.

It is possible that if Her Majesty's Government had used their protecting powers to

hold the hands of the Brunei delegation more firmly, misunderstandings which started

at an early stage of the talks might have been removed as they arose; but it cannot be

held against Her Majesty's Government that they wished the Brunei to make their own

decision without influence, which, had it been 970 exercised, might itself have

provoked misunderstanding. So, for the moment, I would prefer to leave it at that, as

the decision has already been announced by the Sultan in Brunei—a decision which,

as Her Majesty's Government will know from the High Commissioner, was received

there with enthusiasm, rather than with regret.

I am sure that Her Majesty's Government will give every sympathy and assistance to

His Highness when he comes to present his plans (I believe next week) for

constitutional progress in Brunei. The working of our relationship in the light of the

coming into being of the new Federation will also need to be reviewed at this meeting.

We may hope, I think, that after a period of friendly co-operation between Brunei and

the Federation the representatives of Brunei may be ready to reopen discussions with

new confidence and conviction of benefit both to the Federation and to Brunei. After

all, the advantages to Malaysia would be considerable. A yearly contribution of 40million dollars to the Federation was agreed. Brunei has already invested in Malayan

developments, and could do much more under proper safeguards. Malaya is short of

money for development and is at this moment, as we have heard, raising £5 million on

the London market. I fear that the failure to attract Brunei into the Federation will

involve a heavier financial burden upon this country than would otherwise have been

necessary. As one or two noble Lords have already mentioned, a report on the





financial position in the Federation was recently made by M. Jacques Rueff, at the

request of the World Bank. I have not been able to obtain a copy of this report here,

and I wonder whether a copy could be made available to us in this House.

In concluding, may I say that I am sure that Her Majesty's Government will give every

assistance possible, both to Malaysia and to Brunei? The Sultan told me that it was hiswish that relations between Brunei and the new Federation should develop in the most

friendly way. I am sure that the Government of the new Federation will respond in the

same spirit and that there will soon develop an atmosphere of confidence and respect

which will bring Brunei, at no distant date, into the Federation.

971

§ 3.20 p.m.

§ LORD SHACKLETON

My Lords, I think there is little more to say. The unanimity in this debate has been

most striking and, indeed, the intensity of feeling of all your Lordships who are

familiar with these territories has, I think, been rather moving. I was very moved by

the speech of my noble friend Lord Shepherd but it has been matched by others of

your Lordships, and I am surprised that we had to wait until the speech of the noble

Lord, Lord Milverton, for some noble Lord to break into Malay. It is obvious that

rather more than half of your Lordships who have taken part in this debate would have

been able to conduct it into Malay. Unfortunately, the only Malay I can remember is

the word tid 'apa, which means "never mind". It is a fact that this is a part of the worldin which many people of our race have lived and for which they have a deep affection.

My first night in Singapore was actually spent in gaol; it was my 21st birthday. But

this did not dim my affection for the country, and I have remained closely in contact

with some of my friends there, and particularly in Sarawak. There has been a

spokesman for each one of the territories—in fact, British North Borneo has had two.

It was certainly the view of those of us who spent a considerable time in Sarawak that

this was the incomparable territory. Without wishing to go back over the interesting

historical survey of the noble Lord, Lord Twining, it is a fact that the rule of the white

Rajahs was a disinterested one, in which there was a maximum degree of protectionfor the people, and I think Europeans in most areas were not allowed more than four

miles inland. I used to think that the best two territories—perhaps I am prejudiced by

the fact that I happened to visit both—were Sarawak and Greenland. And in

Greenland the Danes would not allow any Europeans in at all. But perhaps I should

keep to the more equatorial climates.




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I remember standing—it was one of the most remarkable moments of my life—after

the first assent of the highest mountain in Sarawak, looking across those cloud-capped

mountains and having a feeling of wonder—indeed, almost a mystical experience; I

wondered what would happen to those territories and 972 those people. Although

many of the people in Sarawak—and I am sure this is true of British North Borneo—

would be described as primitive and pagan, this does not mean in any way that they

are in the slightest degree inferior to their more civilised Malaysian compatriots.

Although they are not Malay, they are a delightful and, I would say, civilised race.

There are many anecdotes for those who have been up river and visited long-houses,

with which perhaps it would be inappropriate to waste your Lordships' time. But the

excellence of the relationship—and this is not, I believe, a sentimental view—between

the European officer and the people of those countries was most striking: the really

close affection and understanding the ability to cross any race or hierarchical

distinction. There is no doubt that it is a part of the world in which it will be easier to

build a multi-racial society; and, indeed, it is to a large extent already a multi-racial

society.

Before the war, in the days when Somerset Maugham was writing about Malaya, I

remember how people used to grumble on one occasion that he told lies, and equally

how they grumbled because he told the truth. It was difficult to establish which was

the really objectionable side of him. Many of my friends and, indeed, relations, have

come back from Malaya with an attitude which seemed to me to have changed out of

all recognition. I was not hopeful, immediately after the war, about the future of

Malaysia. I had not perhaps the hope and enthusiasm that the noble Lord, Lord

Milverton, had in those years. One saw little chance of the creation of a real political

modern State. One was confronted with Communist revolt in the jungles of Malaya,

and yet we are now looking at one of the most encouraging developments in the

modern world.

In the last two debates on foreign affairs, I have urged Her Majesty's Government to

put their maximum effort into achieving success. Although I am sure it was not as a

result of my urging that that they have done it, there is little doubt that this was one

area where it was worth making every effort to achieve a solution. There is no need

for me to repeat the congratulations, both to Her Majesty's Government and in particular 973 to the noble Marquess, as well as to those statesmen in Malaya and

Singapore. This has been adequately done by those of your Lordships who know Lee

Kuan Yew and the Tunku, and who are much more familiar with them than I am.

I think there has been an act of courage also by some of the people in Borneo.

Singapore and the Malay States are foreign territories to them. Many of them are not

Malay people at all. Those splendid people—and I really mean "splendid"; it is not







just a sentimental thing—those admirable people who live rather more in the interior,

would prefer, undoubtedly, to have gone on being ruled by the British. I have said

before in this House that it is a great pity that the whole world does not consent to be

ruled by the British. We have to accept that it does not, and to believe otherwise is a

mistake that we made in certain parts of Africa. It is rather annoying that we should

have to leave the one territory where the people would like us to go on. I wrote to a

friend of mine with whom I was in Brunei many years ago, and he wrote a rather

guarded reply. I wrote back and said, "I take it from this that you are in favour of

Malaysia". I had a postcard back saying, "I hate the idea, but what else is there to

do?". I think we take a more optimistic view of it.

I believe there is absolutely no question that this is the right policy for these

territories. I am only regretful that Brunei has not joined in. I can see possible trouble

lying at that direction, and I am wondering whether the noble Marquess could answer

some of the points of the noble Lord, Lord Grantchester. If there has been suspicion or

misunderstanding, that, of course, happens in all negotiations, and one had rather got

the impression that the breach took place in respect of certain arrangements over oil

revenues. The situation has not been too happy there. We have recently had the

Kadyan rebellion, which affected a relatively small group of the population but clearly

people who felt very strongly. I think it is dangerous that the Brunei situation should

continue too long. Whereas one would be reluctant to see us twisting the arm of the

Sultan too hard, it may be that there should be some extra pressure to indicate, as the

noble 974 Marquess put so gently, that it would be in his own interests or in the

interests of his people—and I think it would be in his interests also—that they should

join this Federation.

I think it was either the noble Lord, Lord Milverton, or the noble Lord, Lord Twining,

who said that it was a pity we could not have waited another ten years, but agreed, as

we all must agree (and he made this clear) that this was the time to do it. It really is

just in time, for I do not like to think what might have happened in regard to this

situation, even if we were only another year behind, because of the unexpected

reaction of Dr. Sukarno. When I say "unexpected", I mean because it changes. On the

last occasion I had to speak on foreign affairs I was congratulating Indonesia on

coming into a more moderate phase, and recently we have found ourselves back in

what has been called, and rightly called, a neo-colonialism. It is depressing, the way,when countries get their independence, they always want to grab somebody else's

territory. Even the Argentine and Chile want part of the Antarctic. This is something, I

suppose, that the ex-imperial powers, who have got this bug out of their system, find

rather difficult to understand; but although we may have been allowed to get away

with it—and I am not making any moral claims in regard to this matter—clearly,





Malaysia must be independent and it must be made abundantly clear that she will have

support.

I hope, too, that the idea of a wider Federation of the whole South-East Asia territories

will not be abandoned. Now may not be the best time, but there is little doubt that if it

could be achieved it would be to the great benefit of the peoples there. They couldthen trade freely with one another, be able to build their countries up, and, possibly,

even overcome the anxieties of those peoples of areas which are under-populated and

get them to accept more population. But one can appreciate that while there is this

suspicion around it will be very much more difficult to achieve. Therefore, I add my

words of congratulation and of good wishes to the new Federation of Malaysia, and

say that I am sure all your Lordships who have taken part in this debate will continue

to watch and, if 975 necessary, prod the Government to give such further help as may

be necessary.

§ 3.33 p.m.


My Lords, I should like to thank all the noble Lords who have taken part in this debate

for the way in which they have received this Bill. In particular, I should like to refer to

the speeches of the noble Lords, Lord Shepherd and Lord Shackleton, both of whom

spoke with knowledge of the area, the noble Lord, Lord Shepherd, I think, in

particular. I should like to pick up one of the observations made by the noble Lord,

Lord Shackleton. That is, although perhaps some might have wished that the creation

of this Federation of Malaysia could have been deferred for, say, ten years, he in his belief thinks it may be that Malaysia has only just been created in time.

In this debate many noble Lords have been good enough to pay tribute to me for such

part as I have been able to play in this, and I assure noble Lords that I am deeply

appreciative of this. I should like myself to add my tribute to some of the principal

architects of this Malaysia who have been mentioned by noble Lords in the course of

this debate. I should like to pay my tribute to Tunku Abdul Rahman, a very

remarkable statesman with a particular touch of genius which has enabled him to help

bring this idea—an idea which has been in many people's minds for many years—into

reality.

I would also pay my tribute to my friend and my associate, his Deputy Prime

Minister, Tun Abdul Razak, who throughout the time we have worked together—and

it has now been nearly a year—has been consistently fair, co-operative and helpful; it

was in very large measure due to his statesmanlike approach that it was possible to

reach agreement in the Inter-Governmental Committee which was concerned with the











affairs of North Borneo and Sarawak. I would also pay my tribute to another very

remarkable man, the Prime Minister of Singapore, Lee Kuan Yew, and also to the two

Finance Ministers, the Finance Minister of the Federation of Malaya, whom I know

very well, Tan Sien Sin, and another friend, Doctor Goh Keng Swee, the Finance

Minister of Singapore.

In referring to these gentlemen I might perhaps be allowed to say two or

three 976 words about the common market. I referred to the common market in my

opening remarks. As your Lordships, I think, are aware, the Governments of Malaya

and Singapore have agreed in principle to the creation of a common market which

would extend to the whole of Malaysia, and this idea has been accepted by North

Borneo and Sarawak. Indeed, one of the reasons for the difficulties which we

encountered over the financial arrangements which we were discussing in London

was exactly how the common market could be worked out, how the entrepôt trade of

Singapore could be safeguarded, and, of course, very important, how the small traders

in Singapore, who in fact are trading in what amounts to a low-tariff area rather than

in a free port, could be taken care of. These were very difficult and complicated

questions which had to be gone into in great detail. This is not news to your

Lordships, and really it was this problem which made the negotiations in London

rather slow and perhaps go on rather longer than some had expected.

However, I am happy to be able to inform your Lordships that satisfactory agreement

was reached. Great patience was shown on all sides, and I am convinced that the

bringing into effect of this common market—which will of course not happen at once;

it will take a period of years to develop—will be to the great benefit of all peoples of

Malaysia. So this was a great step forward, and I think all of us should perhaps pay

our tribute to the World Bank, and to M. Rueff in particular, who was the author of

the report which dealt with this question of the common market for Malaysia.

In this debate have spoken noble Lords with intimate knowledge and clearly great

affection for this part of the world. I have not had the benefit of knowing this area so

long or so well as many of the noble Lords who have spoken, but since August of last

year I have visited this area no fewer than five times and I have travelled something

over 90,000 miles. I have had the benefit of close personal relationships with people

in North Borneo and Sarawak and throughout the territory of Malaya and inSingapore.

Like noble Lords who have spoken—the noble Lords, Lord Milverton, Lord Twining,

Lord Shepherd, Lord Shackleton and Lord Ogmore—and many of 977 the other noble

Lords who know this part of the world, I have found myself becoming increasingly

attached to the people who live in these countries. It has been said with great truth that

the peoples in North Borneo and Sarawak have a deep affection and respect for the







British people. This I found again and again, and I may tell your Lordships that of

course that feeling is mutual.

Tribute has been paid already, but I should like here particularly to pay my own

tribute to the present Governors of North Borneo and of Sarawak, both men who have

followed in the tradition of noble Lords who have spoken in this House, and to theBritish expatriate officers. I think I must have met practically all of them, and I tried

to have personal conversations with as many of them as possible. I think it is perhaps

unnecessary to say this, but I should like to put on record that those officers, like

others who serve this country overseas, as has been said in the course of this debate,

have two homes—they have their home here and they have their home in the country

which they serve. Their concern throughout all these negotiations has been that

nothing should be done which was against the interests of the people of North Borneo

and Sarawak. This has been their one consideration throughout all these negotiations,

and this is something which all the people of North Borneo and Sarawak fully realise.

I think that one can say with absolute justice that the safeguards to which the noble

Lord, Lord Cobbold, referred as being necessary for the people of North Borneo and

Sarawak have, in fact, been achieved, and I believe that one can look forward to real

happiness for these people living in this greater brotherhood of nations and, who

knows!, as somebody said, this association may become greater yet—one cannot tell.

I should like to say how much I regret that the Lord Bishop of Birmingham was

unable to be in your Lordships' House this afternoon. However, we were most

interested in the contribution of the right reverend Prelate the Lord Bishop of

Leicester and grateful for what he was able to tell us. There is, of course, complete

freedom of worship and of propagation of religion in North Borneo and Sarawak. I

was greatly pleased to hear from the right reverend Prelate that in the

discussions 978 that were held with the Prime Minister religious toleration in

Singapore is going to be the order of the day.

The noble Lords, Lord Ogmore and Lord Shepherd both referred to the recent loan

which was floated in London and which, within less than a minute, was

oversubscribed. I think that this is a clear indication of the idea that the financial

world has of the prospects of Malaysia. Had these countries not come together, their

ability to raise funds in the open market would certainly have been nothing like sogreat. So I think we can hope that not only aid that we are able to give from this

country will come to them, but also that they will attract aid from other sources, and

so their rate of development will be considerably increased.

The noble Lord, Lord Grantchester, spoke in particular about Brunei. The noble Lord,

Lord Shackleton, wondered whether I might be able to answer, or perhaps refer in

some way to, some of the observations made by the noble Lord, Lord Grantchester. I





do not this afternoon propose to try to enter into the rights and the wrongs or what

may have transpired between the Federation of Malaya and the Sultan of Brunei but,

as I said in my opening speech, it was a disappointment to us all that the Sultan and

his advisers felt that they were unable to go into this Federation of Malaysia. The

exact reasons for not doing so are not entirely clear, although it may be that there was

a degree of misunderstanding over something which, to us, may not appear important,

but to which I understand His Highness, and perhaps his people in Brunei also,

attached great importance. This was the question of precedence.

There was, I believe, a degree of misunderstanding over this. I do not think there was

any misunderstanding at all over the question of oil. I myself hope that in the fullness

of time—and I hope that it will be sooner rather than later—the Sultan and his

advisers will see that the path of wisdom lies in going into Malaysia. As your

Lordships know, the Sultan is at present in London. It is not for Her Majesty's

Government to exercise pressure on the Sultan of Brunei, but we can try to explain to

him where we believe his best interests lie; and this, of course, we shall do.

979 There was one point I think that I must correct, and I do it with great diffidence,

speaking to an ex-Governor. I think the noble Lord, Lord Twining, was quoting from

some publication of last year, because the present legislative arrangements in North

Borneo are not as the noble Lord described. They have taken quite a considerable step

forward. I will not weary the House with the details, but I thought that I should just

correct the noble Lord, and if he cares to have the exact position now I shall be only

too pleased to give him a note of it afterwards. I think we may be on the brink of

something which will help to bring peace and security and prosperity into a part of the

world which is liable to be unstable.

Reference has been made to Indonesia, and of course there is nothing in this idea of

Malaysia which is in any way antagonistic to Indonesia. There is no reason

whatsoever why Malaysia and Indonesia should not live in amity, side by side. There

is no reason whatsoever why they should not find common interests, because, indeed,

they have many. And it would be in the interests both of Indonesia and of Malaysia if

the present rulers of Indonesia would realise that there is nothing in Malaysia of which

they need be afraid. I do not wish to speak about the Sulu claim which has been

referred to. This is an immensely complicated legal conundrum. I myself do not believe that this is a matter that is in any way insuperable or insoluble.

I believe that we are now on the brink of something great, and I know that all your

Lordships in this House would like to join with me in giving our good wishes to all

those who will go to make up a united people of Malaysia—a people who, if ever

there were, are multi-racial. I have never in my travels been to any part of the world

where multi-racialism was more a reality. In this, of course, there is great hope for a





happy people, an industrious people, a friendly people, a people who deserve all the

good that they have around them and all the prosperity which I believe Malaysia will

give them.

§ On Question, Bill read 2a: Committee negatived.

§ Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of

July 23), Bill read 3a, and passed.

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MALAYSIA BILL (Hansard, 26 July 1963)

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