HC Deb 24 January 1956 vol 548 cc25-7
40. Mr. Jay

asked the Chancellor of the Exchequer the reasons for increasing the rate of release of sterling balances to Egypt in January, 1956.

Mr. H. Macmillan

I would refer the hon. Member to the reply given by my hon. Friend the Economic Secretary to the hon. Member for Blackley (Mr. E. Johnson) on 3rd November 1955.

Mr. Jay

Does the Chancellor think it wise to have increased this rate of release at a time when Egypt has been purchasing war materials from behind the Iron Curtain and elsewhere?

Mr. Macmillan

There are substantial economic advantages, which were explained in that reply.

Mr. Jay

Can the Chancellor give an assurance that this money will not be used for the purchase of munitions?

Mr. Macmillan

No, Sir, but I would point out, although it is difficult to give precise figures, that as a result of the abolition of the control over British exports, the United Kingdom share of the Egyptian market has risen, for the three months September to November, 1955, to 127 per cent. as against 101 per cent. for the corresponding three months of 1954.

Mr. Gaitskell

Can the Chancellor say whether this agreement provides that the additional sterling released is in some way linked with the purchase of additional exports from this country by Egypt? Further, can he say whether it is the case, this being transferable sterling, that it can in fact be used by Egypt to finance the purchase of arms from Czechoslovakia?

Mr. Macmillan

That could be done under the arrangement for the release of sterling balances made many years ago by the Government of hon. Members opposite.

Mr. Gaitskell

May I have an answer to my first question? May I ask the right hon. Gentleman whether he is not aware that in fact this new agreement involves doubling the rate of release of sterling balances?

Mr. Macmillan

That was not the question which the right hon. Gentleman asked. He got an answer to his question, but he did not like it.

41. Mr. Jay

asked the Chancellor of the Exchequer what political concessions were made by the Egyptian Government in return for the increase in the rate of release of sterling balances to Egypt in January, 1956; and whether he will now reconsider the Government's decision to grant this increase.

Mr. H. Macmillan

The answer to the first part of the Question is "No political—only economic—advantage"; the answer to the second part of the Question is" No, Sir."

Mr. Jay

Is the Chancellor aware that the present Prime Minister made a speech in the House in March, 1951, denouncing the policy of making sterling releases to Egypt, without far-reaching political concessions in return? As the Prime Minister is here, can the right hon. Gentleman tell us whether the Prime Minister approved of this increase in releases far beyond that to which the Labour Government agreed?

Mr. Macmillan

Without referring to it, I could not precisely say what my right hon. Friend the Prime Minister said in his speech. I am sure that it was very wise, but it does not appear to have had very much effect on the decision of the Treasury at the time when the right hon. Member for Battersea, North (Mr. Jay) was part of it.