HC Deb 02 July 1957 vol 572 cc860-1
4. Mr. H. Wilson

asked the Chancellor of the Exchequer if he will state how much of the advance debt repayment and other moneys agreed to be made available by the West German Government to the United Kingdom under the Anglo-German Financial Agreement of February, 1957, has been paid and entered into the reserves; and if he will make a statement as to the dates at which payments are to be expected.

Mr. P. Thorneycroft

The Financial Agreements recommended by the Anglo-German Economic Committee to their respective Governments last March were signed on 7th June. The Agreements are subject to ratification by the Federal Parliament.

The contribution of £50 million towards the defence effort of the United Kingdom is for use inside Germany. The £75 million to be used for debt repayment will be a deposit in the name of the Bank deutscher Länder, but the account will not be opened until German Parliamentary procedures are completed. An additional £10 million was deposited in the Arms Purchase Account during April.

Mr. Wilson

Do I understand from that Answer that when the deposit of £75 million is entered into in this country it will then be transferred across the exchanges and will, to that extent, influence the gold and dollar reserves? Secondly, are we also to take the Answer to be a denial of statements in certain City columns last week to the effect that some of this money was being virtually transferred through the ordinary mechanism of the exchange market at a time when exchange rates were peculiarly favourable to Germany?

Mr. Thorneycroft

When the £75 million is transferred, it will move across the exchanges. That is the answer to the first part of the right hon. Gentleman's supplementary. The answer to the second part is that if any money has been put in it cannot have been put in under this Agreement, which has not been ratified, but there may have been transfers on a private basis between the banks.