HC Deb 26 November 1968 vol 774 cc279-81
15. Mr. Marten

asked the Chancellor of the Exchequer what is the total amount of the United Kingdom's overseas debt incurred since October 1964; and when it must be repaid.

Mr. Roy Jenkins

The sum of£1,923 million was borrowed by the Government, of which£585 million has been repaid, and the present value of the amount outstanding is£1,452 million. I will circulate details, including repayment dates, in the Official Report. These SUMS exclude Central Bank transactions.

Mr. Marten

But if one adds on to it the Central Bank transactions, does not that mean that from now until about 1974 Britain must earn a surplus on her balance of payments of about£500 million a year before any direct benefit accrues to the British people? Is that the extent to which the country has been mortgaged?

Mr. Jenkins

No, Sir. I have always indicated that we need very substantial surpluses in order to meet our debt repayment. It is not possible to calculate exactly how much they will be, because there are other factors in the equation—the movement of funds into or out of the country, as the case may be. I have never concealed that there are very substantial surpluses to be earned. I do not think that we have to look beyond this for benefit. I believe that there is real benefit to be gained from reducing our debt and achieving a surplus position at the present time.

Mr. Barnett

Is not it absurd to be talking about repayment of the whole of the debts in so short a period, when once we are in surplus it will be a comparatively simple matter to fund them over a very much longer period?

Mr. Jenkins

My hon. Friend is not right when he suggests that we do not have a considerable and formidable problem ahead of us. He is right when he says that it is not something which can be calculated on a month to month or year to year basis.

Mr. Hordem

Will the Chancellor now say what is the size of the debt incurred under the Basle arrangement?

Mr. Jenkins

No, Sir. I do not propose to give the fluctuations from time to time in this. In reply to a question from the right hon. Member for Enfield West (Mr. lain Macleod) who asked whether the amount of drawing that we could make, and which is available to us as a result of the rundown of the sterling balances since the end of March, was of the order of 600 million dollars, I indicated that it was. I indicate now that there has been since then some rebuilding of sterling balances, which has reduced the 600 million dollars. But I do not think it appropriate, and I do not propose now or in the future, to give the exact figures from month to month.

Mr. Michael Foot

Is it not the case that in the period from the date in the Question there has also been a very heavy export of capital from this country? What fresh measures is my right hon. Friend taking to control this export of capital? In any case, does not it greatly alter the general figure when this export has been taking place?

Mr. Jenkins

It does somewhat alter the general figure, though as a result of taxation measures of my right hon. Friend the Home Secretary our capital balance moved into near balance for some period.I have no further measures to propose.

Mr. Higgins

Will the Chancellor confirm that the information he will place in the Library will include the firm dates

External Loans taken by Her Majesty's Government since October, 1964 are as follows:
Lender Date of Loan Amount of Loan * Repayment dates Amounts repaid* £m. Amount outstanding at 26th November 1968†
International Monetary Fund December, 1964. 357 1967 357 —
Swiss National Bank (Parallel Loan) December, 1964 28 1967 28 —
International Monetary Fund May, 1965 500 1968–1970 77‡ 500‡
Swiss National Bank (Parallel Loan) May, 1965 14 1968–1970 6 11
International Monetary Fund March, 1966 44 1969–1971 — 51
U.S. Export-Import Bank, Line of Credit (Military Aircraft Loans) April, 1966 19 1966–1973 6 16
June, 1966 12 1966–1973 4 10
August, 1966 66 1967–1974 11 66
July, 1967 138§ 1968–1976 — 142
Swiss Bank Consortium October, 1967 37 — 44 —
Bank for International Settlements November, 1967 104 1968–1969 52 52
Deutsche Bundesbank April, 1968 21 1972 — 21
International Monetary Fund June, 1968 583 1971 — 583
Total 1,923 585 1,452
* At the value of sterling current at the time.
† At the present value of£ sterling.
‡ Repayment obligation reduced from£583 million to£577 million as a result of a sterling drawing from the International Monetary Fund by New Zealand;£77 million has been repaid.
§ Total amount of credit drawn at 26th November, 1968.
This table does not cover confidential Central Bank transactions.
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