HC Deb 15 June 1961 vol 642 cc618-9
15. Mr. Rankin

asked the Chancellor of the Exchequer if he will reconsider the principle that Commonwealth assistance loans should be granted at interest rates higher than those ruling in the London money market, in view of the special appeal made by Mr. Nyerere at the recent Constitutional Conference on the introduction of self-government for Tanganyika.

Mr. Barber

These loans are made at rates of interest which reflect the rate at which Her Majesty's Government could themselves borrow for comparable periods. These are more favourable rates than the countries concerned could themselves expect to obtain on the market. I regard these as appropriate terms for this loan finance and I cannot undertake any change in this respect.

Mr. Rankin

Does the hon. Gentleman realise that many of these new African States are being compelled, unfortunately, through the Government, to pay extravagant rates for the money which they require for their development and that, as a consequence, their development is hindered and the cost of living is going up? Does he know, for instance, that in Uganda recently the cost of electricity went up by 15 per cent.? Does the Government's policy really help to produce in these new States a state of affairs which the hon. Gentleman would like to see? Will he reconsider the matter and think of assistance loans at preferential rates?

Mr. Barber

I think that the rates currently being charged are reasonable. It is fair to say that most of the less-developed countries could not borrow at all on the London market, or, if they had to do so, would certainly have to pay more than they are paying at present. Moreover, as the hon. Member knows, we assist these countries in other ways.

Mr. H. Wilson

Is it not the plain fact that, if the Government's interest policy were more rational, these and other countries and home borrowers and others in this country could all borrow at more reasonable rates? In view of the figures in regard to invisible payments disclosed on an earlier Question today, has not the hon. Gentleman yet woken up to the fact that these high interest rates mean a very heavy drain across the exchanges paid to people abroad from whom we are borrowing money? Will the Government reconsider their whole policy?

Sir J. Duncan

On a point of order, Mr. Speaker. Will you renew your request that supplementary questions be shorter?

Mr. Speaker

I am obliged to the hon. Gentleman, but I regret that it is becoming rather repetitive.

Mr. Barber

That matter raised by the right hon. Member for Huyton (Mr. H. Wilson) is outside the ambit of this Question and raises broader issues.