HC Deb 11 December 1956 vol 562 cc214-5
33. Mr. Roy Jenkins

asked the Chancellor of the Exchequer whether he can now give further details of the Government's application to the International Monetary Fund.

Mr. Walker-Smith

Yes, Sir. Her Majesty's Government have applied to the International Monetary Fund for a drawing of 561.47 million United States dollars and a standby arrangement to draw currencies worth up to 738.53 million United States dollars. These requests were approved by the Executive Board of the Fund at its meeting in Washington yesterday afternoon.

Mr. Jenkins

Can the Economic Secretary confirm that if, as we hope, our gold and dollar position begins to improve in the near future, the first claim on our reserves will then be the repayment of these drawings before we can begin in any normal sense to build up our reserves again?

Mr. Walker-Smith

We have undertaken to repurchase the dollars obtained by the drawings within three years.

Mr. H. Wilson

Is this not a very grave statement for the Government to have to make at this time? Does this not mean that the Government are throwing in one of our last lines of reserve to pay for the military expedition to Suez and is it not a fact that it was always envisaged that reserves as important as these might be needed in case of some worsening of world economic and financial conditions? Will the Government bear in mind what my hon. Friend has said, that they should make this a first priority of financial policy to re-establish these reserves in order that we can be fortified against any further difficulty which we may meet?

Mr. Walker-Smith

Yes, and we shall certainly hope to do better than our predecessors in this respect. In the six months following September, 1947, the Labour Government made four drawings on the fund to the total of 300 million dollars. A repayment to the fund of 124 million dollars was made in 1954, when the present Administration was in power.

Mr. Wilson

Surely the hon. and learned Gentleman does not want to mislead the House? The present Government have borrowed not 300 million dollars but, in various forms, 1.300 million dollars. Will the hon. and learned Gentleman inform the House by how many hundreds of millions of dollars the reserves today are below the figures when we on this side of the House left office?

Mr. Walker-Smith

The right hon. Gentleman pools these amounts together as a borrowing, but he will appreciate that the drawing is 561 million dollars. The larger figure of 738 million dollars is not a borrowing as of now, but is merely a standby arrangement.

Back to