HC Deb 31 January 1957 vol 563 cc1153-5
26. Mr. E. Fletcher

asked the Chancellor of the Exchequer the present amount of blocked sterling held by the Government of Egypt; and the policy of Her Majesty's Government with regard to its release.

38. Mr. E. Johnson

asked the Chancellor of the Exchequer the total amount of Egypt's sterling balances held in London; and if he will make a statement about the position in regard to these balances.

Mr. Birch

It is not the practice to reveal the balances of individual countries but the last published statement by the National Bank of Egypt showed, on 30th August, 1956, a figure of £E.11.4 million for the balances in the No. I Account and £E.100.5 million for those in the No. 2 Account. On 1st January, 1957, £20 million sterling was transferred from the No. 2 to the No. 1 Account. The balances on both these Accounts are subject to the Exchange Control restrictions imposed on 28th July, 1956.

Mr. Fletcher

Will the Minister say whether it is still the policy of Her Majesty's Government to apply economic sanctions to Egypt, and whether any conditions were attached to the recent release of £20 million?

Mr. Birch

What happened was that, in accordance with existing agreements, the £20 million was transferred from the No. 2 to the No. 1 Account, but when it reached the No. 1 Account it was subject to the exchange restrictions imposed at the end of July. Therefore, the transfer has mystical rather than practical significance.

Mr. Johnson

Will my right hon. Friend give an assurance that he will not release any of these balances until Egypt has paid for its illegal seizure of the Suez Canal and the property of British firms and citizens?

Mr. Birch

Clearly, my hon. Friend's, point is in mind, but as negotiations have not yet started I would rather not be pressed on that subject.

Mr. Jay

Is it the policy and intention of Her Majesty's Government that trade and economic relations with Egypt should be resumed?

Mr. Birch

It is the policy to start negotiations as soon as may be.

31. Major Wall

asked the Chancellor of the Exchequer why, in view of our present relations with Egypt, £20 million has been transferred from the Egyptian No. 2 to No. 1 Account; and whether he will give an undertaking that no Egyptian funds will be released until adequate compensation has been negotiated for British subjects whose property in Egypt has been sequestrated.

Mr. Birch

The £20 million transferred from the No. 2 to the No. 1 Account remains subject to the Exchange Control restrictions imposed on 28th July, 1956. As regards the second part of the Question, I would refer my hon. and gallant Friend to the reply given to the hon. Member for Accrington (Mr. H. Hynd) on 24th January, 1957.

Major Wall

Is my right hon. Friend aware that, although these unfortunate people are having day-to-day help, what they really want is to be able to establish themselves in business in this country? Is he aware that that requires capital and that their capital in Egypt was seized? Cannot he use Egyptian assets in this country to compensate them, or if he will not do that, can he undertake that these Egyptian assets and blocked balances will not be released until compensation has been negotiated?

Mr. Birch

Negotiations on claims and counter-claims have not yet been started and, as I said a few moments ago, I would rather not be pressed on that issue for the moment.

37. Mr. Rankin

asked the Chancellor of the Exchequer what sums were released to Egypt during 1956 from her blocked sterling balances.

Mr. Birch

Twenty-five million pounds, of which £20 million was released on 2nd January, 1956, under the agreements providing for annual releases. The balance represents releases made before 28th July, 1956, under other provisions in these agreements. The most important of these releases was £3.2 million for sales of surplus stores.

Mr. Rankin

Is the right hon. Gentleman aware that earlier this afternoon his right hon. Friend the President of the Board of Trade said that if we had to resume trade with Egypt a financial and economic settlement would be required? Does he propose to release these blocked assets progressively in order to stimulate that trade?

Mr. Birch

When negotiations start it is clear that the factor of these balances in London will be taken into account.