Sterling Balances

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 2nd March 1948.

Alert me about debates like this

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch 12:00 am, 2nd March 1948

asked the Chancellor of the Exchequer if he will give an assurance that under the present financial agreements concluded by His Majesty's Government with India and Pakistan, no sum devolved from sterling balances either held on blocked account or released to current account can be used by those Dominions to purchase units of His Majesty's Navy.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

No, Sir. It would be meaningless to seek to correlate payments out of current account with releases to current account, rather than with the much larger amounts received from current earnings.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

Is the Chancellor aware that practically the whole of that current account is made up of releases from the blocked account, that the amount so released at the moment stands at the figure of some £60 million, and that if he does not reconsider this, it merely means that the moneys spent by this country in India for the defence of India can now be used by that country to buy units of the Royal Navy, which was one of the main factors in saving India?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I do not agree with the hon. and gallant Gentleman's premises.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

If the right' hon. and learned Gentleman does not agree with them, will he give facts and figures to disprove them?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I have already given the reason—because there are much larger sums received in the current account from current earnings.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

asked the Chancellor of the Exchequer what is the total sum released since 1st April, 1947, to the latest convenient date of moneys from blocked sterling balances to current accounts and the countries to which such releases have been made.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

In accordance with formal Agreements with Egypt, India, Iraq, Argentina, Brazil and Uruguay, the releases during the period 1st April, 1947, to 31st January, 1948, from restricted accounts to current accounts amounted to £123 million apart from releases of £55 million for working balances. These figures do not include the releases of £24 million plus £10 million for working balances to India and Pakistan in accordance with the two White Papers published today.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

Is the Chancellor aware that these figures add up to over £200 million, and that they constitute to this country entirely unrequited exports, and mean that something like one-sixth of our total exports are now unrequited?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I am afraid that I do not agree with the deduction.

Photo of Mr Thomas Scollan Mr Thomas Scollan , Renfrewshire Western

Are the Government considering some way of trying to get rid of this burden which we had to shoulder for the protection of India?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

If the hon. Member is referring to the outstanding sterling debt to India, we have stated that when the opportunity arises, we shall enter into negotiations with regard to this matter.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

The right hon. and learned Gentleman said that he does not agree with my deduction, but is it not a fact that any moneys released from these blocked balances to current account can be spent on United Kingdom exports, and therefore we are giving the countries concerned something for which we receive nothing in return?

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I do not agree at all. We may get a very valuable trade concession in return.

Photo of Sir Walter Fletcher Sir Walter Fletcher , Bury

Will the right hon. and learned Gentleman say further whether these balances can be used to buy commodities within the sterling bloc which can be sold for dollars, thereby depriving us of dollars as well as making unrequited exports?

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

asked the Chancellor of the Exchequer what negotiations took place between His Majesty's Government and the holders of sterling balances in Palestine and Transjordan, before such balances were blocked and the countries excluded from the sterling area.

Photo of Mr Oliver Crosthwaite-Eyre Mr Oliver Crosthwaite-Eyre , New Forest and Christchurch

May I congratulate the Chancellor of the Exchequer on this matter and ask him whether, having made this great step forward in his financial policy, he will now pursue the same policy vigorously in regard to the other sterling balances outstanding?