International Monetary Fund

HC Deb 07 November 1961 vol 648 cc787-8

28. Mr. Biggs-Davison

asked the Chancellor of the Exchequer how the currencies and amounts drawn from, and made available by, the International Monetary Fund compare with the currencies and amounts there deposited by the United Kingdom; what conditions were attached to such withdrawals and deposits; to what extent his economic measures and the Government's approach to the European Economic Community were connected therewith; and what recent changes have been made in International Monetary Fund rules and procedure.

Mr. Selwyn Lloyd

As the Answer to my hon. Friend's Question is necessarily long, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the Answer:

The facilities granted to the United Kingdom by the Fund last August comprised: a drawing in nine currencies, totalling the equivalent of $1,500 million; and a one-year standby arrangement for the equivalent of $500 million. $280 million of the drawing has since been repaid, and the standby facilities were automatically increased by the same amount.

Our subscription to the Fund is equivalent of $1,950 million. Of this $399 million was paid in gold; and the remainder in sterling, the bulk of which is re-lent to the United Kingdom until it is needed by the Fund. In addition, the United Kingdom has paid to the Fund, in accordance with the usual procedures, the sterling equivalent of the outstanding drawing; and this sum also is re-lent to the United Kingdom until it is needed.

The drawing was conditional on an undertaking by the United Kingdom to comply with the Fund's normal repayment rules adopted in 1952. As I said in this House on 25th July, this means that the drawing must be repaid within three to five years. In addition, the facilities were granted after I had made my statement to this House on 25th July, and when making its decision the Fund took into account the main lines of government policy as announced in that statement.

The question of United Kingdom membership of the E.E.C. was not in any way considered in connection with the drawing.

The only recent change in the Fund's rules and procedure relating to drawings has been the informal adoption of the practice that a country proposing to draw should discuss with the Fund the currencies in which the drawing should be taken, so as to ensure that it does not impose an undesirable burden on other countries.