§ 66. Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer why the Bank of England objected to the proposed loan by Messrs. Kleinworts to the Government of Northern Rhodesia.
§ Mr. GaitskellThe Northern Rhodesian Government consulted His Majesty's Government on the credit in question, and we advised Northern Rhodesia that short-term finance of the type proposed was not appropriate.
§ Colonel Crosthwaite-EyreWhen the Minister said that they advised the Northern Rhodesian Government that this was not appropriate, would he give us the reasons? This credit was urgently needed by Northern Rhodesia for six months to finance imports that were self-liquidating, and I think the House should know the reason why His Majesty's Government gave that advice.
§ Mr. GaitskellBecause we thought that in the circumstances it was appropriate to have a longer term advance.
§ Mr. KeelingIs the Minister aware that this veto has aroused great indignation—as can be seen in the Press—in both Northern and Southern Rhodesia, where people cannot understand why the 2457 City of London should be refused permission to lend money for imports of wheat from Australia to Rhodesia when they are not only allowed, but encouraged, to lend money for manufacturing purposes to France and Austria?
§ Mr. GaitskellThere is no question of a veto. The Northern Rhodesian Government consulted us and we gave them our opinion on the matter.
§ Lieut.-Commander BraithwaiteIs the right hon. Gentleman also aware that acceptance credits have been encouraged, both by the Bank of England and the Treasury, to finance imports into the Iron Curtain countries, notably Poland and Yugoslavia? Why not our own Empire?
§ Mr. GaitskellBecause in this case it was most undesirable to have a credit which might suddenly be withdrawn.
§ Colonel Crosthwaite-EyreWould the Minister tell us why, if short-term, not long-term credit was desired, His Majesty's Government should take it upon themselves to say that only a long-term credit would receive their approval? Can we have an answer to that?
§ Mr. GaitskellBecause His Majesty's Government considered, when their advice was sought on the matter, that a long-term credit would be more appropriate.
§ Mr. GaitskellAs has already been explained, because it would be unsatisfactory in this case if the credit were suddenly to be withdrawn.
§ Captain John CrowderWill the Minister agree that the Colonies are asking for merchant banks to be allowed to help them in their financial problems, and will he encourage them?
§ Mr. GaitskellIt is not a question of discouragement. This particular form of finance was considered by His Majesty's Government not to be appropriate to these particular circumstances.