Government Survives No-Confidence Vote on Issue of Compensation Payments to Settlers in Sinai, JTA, Jan. 27, 1982.

Premier Menachem Begin’s government narrowly survived a no-confidence vote today in a Knesset angered by what it declared to be excessive compensation payments to the settlers in northern Sinai.

The 55-52 vote against the no-confidence motion followed the adoption of a resolution by the Knesset last night describing as “scandalous waste” the government’s offer to pay the settlers over a quarter billion dollars. The money is to compensate them for the homes, farms and businesses they will have to leave behind when Israel completes its final withdrawal from Sinai next April 26.

The sum, proposed by Deputy Premier and Agriculture Minister Simcha Ehrlich and endorsed by Begin, split the Cabinet. Ministers supporting the deal argued that the high price was necessary to assure a peaceful evacuation of Sinai. But others, notably Finance Minister Yoram Aridor, warned that the payment would touch off a new round of inflation.

The settlers themselves have not yet accepted the offer. Businessmen in the Yamit region have called it unfair because they would receive less than farmers. The Knesset Finance Committee insists that the payments be made partly in long term government bonds and the cash balance subject to income tax. Begin so far has opposed those conditions.