HC Deb 13 March 1958 vol 584 cc608-9
46. Mr. Cronin

asked the Prime Minister to what extent, in the course of his Commonwealth tour, he discussed the sterling balances; and what understandings he achieved as to withdrawals from them.

The Prime Minister

The sterling holdings of Commonwealth countries were not one of the principal topics of discussion during my Commonwealth tour. The holdings are, of course, and will continue to be freely at the disposal of their owners.

Mr. Cronin

Bearing in mind that unco-ordinated withdrawal of sterling balances is one of the chief sources of our financial difficulty, and that the situation is likely to deteriorate as additional countries achieve independence, may I ask whether the Prime Minister does not regard his reply as vague and unsatisfactory?

The Prime Minister

No, Sir. I would like to make it clear that in this sense we are a banker, and people who have balances expect to have the right to draw on their balances as and when they require to do so. At the same time, Commonwealth countries are aware of the need to keep sterling strong. There is close consultation among us all on this matter. It should be borne in mind that by no means all the sterling assets are composed of short-term assets. A large part is represented by statutory backing for currencies or the assets of special official funds such as sinking funds, savings banks and pension funds, as well as price stabilisation and marketing board funds.

Mr. Gaitskell

While agreeing that owners of sterling balances are free to withdraw them, may I ask the Prime Minister to say whether the general question of the operation of the sterling area will be discussed at the forthcoming Commonwealth Economic Conference?

The Prime Minister

I feel sure that it will.