HC Deb 11 March 1952 vol 497 cc1258-9
54. Mr. Eric Johnson

asked the Chancellor of the Exchequer the amount of the loans the United Kingdom has received from Canada, since 1939, which have not yet been repaid; the amount of principle and interest which is repayable annually in respect of these loans; and also the amount the United Kingdom has received in free gifts from Canada since 1939.

Sir A. Salter

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

Following is the answer (all amounts expressed in Canadian dollars): In 1942 the Canadian Parliament appropriated $1,000 million as a gift to the United Kingdom for the purchase of food, munitions and other requirements. In 1942 the Government of Canada made a loan of $700 million, free of interest, to the United Kingdom. Under agreements made between the United Kingdom Government and the Government of Canada, dollars accruing from the sale by United Kingdom residents to persons not resident in the United Kingdom of Canadian market securities or from redemption are used in repayment of the loan, but the Canadian Government allow us to set off against the amount repayable in this way the cost of new direct investment in Canada by United Kingdom residents. By 31st December, 1951, the outstanding principal had been reduced to $222,656,798. The two Governments have agreed that the interest free provisions of the loan shall continue in force until 1st January, 1954. During the war, Canada provided under the Mutual Aid Programme munitions, food and other war supplies and services to the United Kingdom. The total aid given under this programme amounted to about $1,871 million. Under the terms of the Financial Agreement between the United Kingdom Government and the Government of Canada dated 6th March, 1946, the Government of Canada extended to the United Kingdom a line of credit of $1,250 million, repayable in fifty annual instalments, with interest at 2 per cent. per annum. A total of $1,185 million was drawn by the United Kingdom. The first annual payment in respect of interest and principal fell due on 31st December, 1951, and on that date payment was made $23,700,000 in respect of interest, and $14,010,255 in respect of principal. The amount now outstanding is $1,170,989,745. Under the terms of the 1946 Agreement indebtedness amounting to $425 million of the Government of the United Kingdom to Canada in respect of the Commonwealth Air Training plan was cancelled. Under a supplementary agreement all remaining claims arising out of the war were settled by a payment by the Government of the United Kingdom to the Government of Canada of $150 million. The foregoing does not include assistance offered by the Government of Canada to member countries of the North Atlantic Treaty Organisation, including the United Kingdom, to further the common defence effort.