HC Deb 10 July 1956 vol 556 cc190-1
46. Mr. H. Wilson

asked the Prime Minister what representations he has received from Prime Ministers and other Government representatives of Commonwealth countries about the difficulty of raising capital in London for Commonwealth development and about the rates of interest charged for such capital as is available.

The Prime Minister

I would not wish to add to the agreed statement made at the end of our Conference. In this it was said that the Prime Ministers noted with satisfaction the United Kingdom's determination to maintain and improve its capacity to serve as a source of capital for development in Commonwealth countries.

Mr. Wilson

We all welcome the emphasis placed on this subject at the recent Prime Ministers Conference, but is the right hon. Gentleman not aware that last year, out of current income, this country found a net figure of only £4 million for investment overseas? Is he further aware that a considerable number of Commonwealth countries are now having to borrow from such countries as Norway, Switzerland and the United States, partly because the capital is not available here, and partly because of the extortionate rates of interest at present charged by this country?

The Prime Minister

I should not like to debate the first part of the right hon. Gentleman's supplementary question now. As regards the general position, it is perfectly true that we wish there were more capital available for this investment, and, in point of fact, as I think my right hon. Friend the Chancellor of the Exchequer made plain a short time ago, we hope there will prove to have been, in the first six months of the year, a surplus of £100 million for overseas investment, and although that is not as much as we should like, it is a very considerable improvement on last year.

Mr. Wilson

But quite apart from the question of surplus, which raises very wide issues of economic policy, is not the Prime Minister aware that this very essential borrowing is also inhibited by the penal Bank Rate in operation, and will he discuss that with the Chancellor of the Exchequer because of its effect on Commonwealth borrowing?

The Prime Minister

That is why I carefully read out the Commonwealth statement. What it referred to was this country as a source of capital. There is nothing in it about the rates of interest.

Mr. Beresford Craddock

Is it not a fact that this country is also subscribing very large sums to the Commonwealth through the colonial development and welfare fund?

The Prime Minister

Yes, Sir, that is true, but it also remains the fact, as I say, that although the first six months of this year have been better, there is not as much capital as we should all like to see, party politics aside, for investment in the Commonwealth overseas. But as a general proposition, that is true.

Mr. Gaitskell

Without wishing to enter into the detail of a very complicated matter, may I ask the Prime Minister if he would like to make it plain that it would not satisfy the terms of the communiqué if we were to continue borrowing on short-term from the Colonies and lending on long-term to the rest of the Commonwealth?

The Prime Minister

No; I think it is fair to say that the figure which my right hon. Friend gave of £100 million was overall investment.