HC Deb 10 November 1949 vol 469 cc1400-2
69 and 70. Colonel Crosthwaite-Eyre

asked the Chancellor of the Exchequer (1) on what grounds His Majesty's Government have paid the Persian Government £7,500,000 for the war-time use of railways in Persia;

(2) what proportion of the £7,500,000 now to be paid to Persia will be in transferable or convertible sterling; and what proportion in gold or hard currency.

Mr. Jay

As the answer is a long one I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Colonel Crosthwaite-Eyre

While I accept that, will the hon. Gentleman please say on what basic grounds this claim has been allowed in the case of Persia? Surely there can be no clearer case. If anybody owed any money at the end of the war, it was the Persians who owed it to us. Why do we now give them £7,500,000 of which 60 per cent. is to be paid in gold?

Mr. Jay

The basic ground is because services were given to this country by the Persian railways during the war.

Colonel Crosthwaite-Eyre

A great many services were given by this country to Persia during the war. If we are now to pay £7,500,000 for the use of the railways, of which 60 per cent. is in gold, how can we ever expect to make up our gold and dollar deficit?

Mr. Jay

The sum in question is, of course, a net figure.

Mr. Oliver Stanley

Then this represents another addition to the already heavy total of unrequited exports?

Mr. Jay

Not necessarily. That depends upon the whole balance of payments between ourselves and Persia.

Mr. Stanley

Is not that answer a little disingenuous? That in fact gives the Persians the right to call for £7,500,000 more of exports than we get from them.

Mr. Scollan

Is it not the case that we gave £60 million to the shareholders of the British Railways for the use of the railways during the war?

Colonel Crosthwaite-Eyre

I beg to give notice that I shall raise this matter on the Adjournment.

Following is the answer:

His Majesty's Government have paid to the Persian Government a sum of £8,206,676 6s. 10d. The figure originally agreed was £5,700,000, but was subsequently written up.

The sum represented the balance due to the Persian Railways on account of British military traffic carried during the war up to 30th June, 1945, the total charges for which were of the order of £19 million.

When the railway settlement was under discussion with the Persian Government in 1946 it was agreed that the sum subsequently determined to be payable to the Persian Government should be settled in accordance with the financial arrangements then in force between Persia and ourselves. This implied payment of 60 per cent. in gold and the remainder in sterling to the account of the Persian Government, which bore a revaluation guarantee.

The Persian Government has agreed to postpone the exercise of their right to obtain this 60 per cent. in gold, provided that it will be available to them in case of need. Payment of the sum of £5.7 million agreed with the Persian Government has therefore been made in sterling and the amount written up to £8.2 million in accordance with the revaluation guarantee.

Persian sterling is transferable to other transferable account countries and also to American account in payment for essential supplies not obtainable for sterling on equivalent terms.