HC Deb 04 February 1947 vol 432 cc1573-4
55. Colonel Crosthwaite-Eyre

asked the Chancellor of the Exchequer with what countries negotiations are now proceeding relative to the liquidation of blocked sterling balances.

Mr. Dalton

Preliminary discussions are now taking place with India, to be followed by similar discussions with Egypt and Iraq.

Colonel Crosthwaite-Eyre

Can the Chancellor say whether the discussions will be under way by July of this year, and can he give an assurance that none of them will be brought to a conclusion without first coming before this House for discussion?

Mr. Dalton

They are under way. I tried to convey that preliminary discussions have already begun with India. July is a date which is set for us to endeavour—whether with success or not time will show—to reach agreement with all the holders of sterling balances.

Mr. Walter Fletcher

In view of the crushing amount of the Indian sterling balances—between £1,000 million and £2,000 million—and the special circum-stances attached to them, will the Chancellor of the Exchequer give an assurance that any arrangement now under way will not be finalised until it has been discussed in this House?

Mr. Dalton

The discussions have only just begun, and if we reach any conclusion or any settlement which is satisfactory to the Government we shall certainly inform the House.

Mr. Churchill

Is it not a fact that the Governor-General of India was notified in the time of the late Government that Great Britain reserved her full rights to present a counter-claim on account of the effective defence of India by all means—land, sea, air and diplomacy—by which the freedom of India from foreign invasion was secured?

Mr. Dalton

I cannot charge my memory. The right hon. Gentleman was Prime Minister at the time, and if he says that such a message was sent I would not for a moment challenge him. It is not contrary to my recollection, although I do not exactly recall the message. It may be a fact that that is so.

Mr. Churchill

Is that point going to be made? How do we accept the great concessions made on Lend-Lease by the United States and yet divert a large portion of our remaining assets to-payment of an exactly similar war debt to the Indian Government?

Mr. Dalton

I would prefer to wait until these preliminary discussions have advanced a stage further.