24. Mr. H. Wilsonasked the Chancellor of the Exchequer if he will make a statement about the negotiations for a loan from the Export-Import Bank of the United States of America.
§ 35. Mr. Jayasked the Chancellor of the Exchequer whether the negotiations for a 500 million dollar loan from the Export-Import Bank have now been concluded.
§ Mr. P. ThorneycroftThe formal Agreement with the Export-Import Bank of Washington establishing a 500 million 1026 dollar line of credit in favour of the United Kingdom was signed in Washington yesterday, 25th February. The text of the Agreement will be published as a Command Paper as soon as possible. The Agreement enables us to recoup at any time up to 28th February, 1958, a substantial part of our dollar expenditure on goods and services from the beginning of this year, and the gold and dollar reserves are thus effectively reinforced to this extent. Whether, and if so when, to draw on the credit will be a matter of judgment to be decided in the light of circumstances.
Mr. WilsonSince it has taken nearly three months to negotiate this loan, despite the very full security that Her Majesty's Government have offered, will the right hon. Gentleman say what difficulties have been encountered in the negotiations? While, of course, we shall want to study the Command Paper before commenting on it, will the Chancellor say what rate of interest applies to this loan?
§ Mr. ThorneycroftThe rate of interest is 4½ per cent. on the money as drawn, that is to say, we are not paying any interest on the money until we actually draw it. I do not think that any unusual difficulties have arisen in this case, and if there were any I would not wish to go over them. We are not pressed for this loan. There is no immediate need for it. The help that it gives is to make a substantial reinforcement to the reserve, and I am very happy that this has taken place.