HC Deb 27 March 1956 vol 550 cc1959-61
34. Mr. P. Williams

asked the Chancellor of the Exchequer when the last sterling balance release was made to Egypt; how much it was; when the next payment is due; and what amount is now outstanding.

Mr. H. Macmillan

The last published figure for the amount outstanding was £128 million, in October, 1955. Since then £20 million were released to Egypt on 2nd January, 1956, and a further £20 million is due to be released in January, 1957.

Mr. Williams

Is my right hon. Friend aware that while Egypt continues to behave in the antagonistic way in which she has been behaving towards this country, there is no reason whatsoever for releasing the sterling balances? Will he stop the release on that ground alone?

Mr. Macmillan

There are very large questions of commerce and financial policy involved. If we set up as a central banker, we have to meet the deposits of those who bank with us.

Mr. Jay

Does the Chancellor of the Exchequer agree with the view so often expressed by the present Prime Minister that financial concessions to Egypt should be dependent upon the political policy followed by the Egyptian Government?

Mr. Macmillan

Concessions and the ordinary operation of central banking are two quite different things.

Mr. Shinwell

Is there not one aspect of commercial policy which should be taken into consideration, namely, the refusal of the Egyptian Government to allow the free passage of shipping through the Suez Canal?

Mr. Macmillan

There are many aspects, and that was why I was only indicating to my hon. Friend that this is a difficult matter to deal with precisely by question and answer. These are very large questions, and I content myself with giving my hon. Friend the facts.

Mr. Gaitskell

Is the right hon. Gentleman not aware that while it is no doubt very proper that we should stand by the financial agreement, there is no necessity in present circumstances for repaying the sterling balances at a faster rate than that provided under the agreement?

Mr. Macmillan

That is another question. I was asked what was the plan under the agreement, and I gave the figures.

Mr. Williams

In view of the way in which these balances were originally established, will my right hon. Friend look at the matter again, with a view to starting discussions with the Egyptian Government to review the whole problem of the sterling balances?

Mr. Macmillan

That is another question. I must point out that this country is governed by its agreements. In the July, 1951, agreement, in the Exchange of Letters, it was definitely laid down that Her Majesty's Government had no intention of scaling down the total amount of the sterling balances. Whether that was right or wrong, I would be very unwilling to go back on a definite undertaking given by the Government, even a Government of another complexion.