HC Deb 14 November 1961 vol 649 cc173-4
16. Mr. Frank Allaun

asked the Chancellor of the Exchequer what conditions were imposed by the International Monetary Fund before making Britain the recent £714 million loan.

Mr. Selwyn Lloyd

I would refer the hon. Gentleman to the reply which I gave to my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) on 7th November.

Mr. Allaun

Will the Chancellor give the House an assurance that the loan was in no way dependent on the pay pause or cuts in the social services, as the Institute of Directors' Journal says it was? Is he aware that the Economist reported that these strings would require the Chancellor to stand by his tough measures, including the wages pause? If that was the case, does it not mean that international bankers were being allowed by the Government to determine our policy?

Mr. Lloyd

I tried to deal with the question of conditions in my Answer to my hon. Friend. I said that the only condition with regard to the loan was in respect of its repayment it had to be repaid within three to five years. Apart from that, there were no conditions. I made my statement in the House of Commons on 25th July, and after I made that statement, the Fund agreed to the loan.

Mr. H. Wilson

But was not the statement made by the International Monetary Fund at the time in the light of—or perhaps in the darkness of—the Chancellor's statement on 25th July, and is not the whole point that the Chancellor was able to get this very large loan only in return for promising reactionary policies of a kind which would please certain international bankers?

Mr. Lloyd

It is not a question of conditions or being given in return for anything. There was no bargaining about this at all. I made a statement about the policy of the Government, and after the statement was made, the loan was granted.

Mr. Jay

Does the Chancellor deny that he discussed such matters as the seven per cent. Bank Rate and the wages pause with the International Monetary Fund before the loan was granted?

Mr. Lloyd

I categorically deny that I ever discussed any question of the wages pause or a specific figure with regard to the Bank Rate.