HC Deb 15 February 1972 vol 831 cc232-4
17. Mr. Hordern

asked the Chancellor of the Exchequer if he will now give the present state of the United Kingdom's short and medium-term debts to the International Monetary Fund and other international bodies net of loans made through use of the Reciprocal Swap Facility.

59. Mr. Parkinson

asked the Chancellor of the Exchequer what is the total amount of short-term and medium-term official overseas debt outstanding; and how this compares with June, 1970.

Mr. Maurice Macmillan

At end-June 1970 the United Kingdom's short and medium-term official overseas debt amounted to £1,461 million.

At the end of last month it had been reduced to £415 million.

Mr. Hordern

Apart from the technical difficulties in repaying dollars which no one seems to want, is it now the case that we are quite clear of all the vast burden of short and medium-term indebtedness which the previous Administration left behind them? Is not it now the case that we are heading for the largest surplus on the balance of payments ever? Are not these the conditions for sustained and rapid economic growth, which would be assisted even more by a timely and generous cut in the Bank Rate?

Mr. Macmillan

I cannot comment on my hon. Friend's last sentence, but I agree fully with what he said in the remainder of his supplementary question. I remind the House that it is a technical difficulty of repaying the remaining £415 million of debt which is causing the hold-up.

Mr. Parkinson

In view of the reply which I received earlier about our large reserves, and in view of the small indebtedness about which we have just heard, may I take this second opportunity to urge my right hon. Friend to consider lifting or relaxing the restrictions on overseas investment?

Mr. Macmillan

My right hon. Friend the Chancellor of the Exchequer will bear in mind my hon. Friend's suggestions.

Dr. Gilbert

In view of the comments about the problems of convertibility, can the right hon. Gentleman say something about the Government's proposals to deal with the problems, and can he assure us that in no circumstances are the Government's endeavours being directed to trying to influence the American authorities to restore convertibility into gold?

Mr. Macmillan

As I said in answer to an earlier Question, the detail of the discussions taking place in the I.M.F. is confidential. But I will draw the attention of my right hon. Friend the Chancellor of the Exchequer to the points made by the hon. Gentleman, and I can assure him that the discussions are continuing.

Mr. Roy Jenkins

Is the right hon. Gentleman aware that the rate of repayment of debt in the past 18 months, which we welcome, has been just about the same as the rate of repayment in the 18 months to June, 1970, and that what has happened makes nonsense of one of the main Conservative propaganda points at the General Election that we had debts hanging round our shoulders for many years to come?

Will the right hon. Gentleman also apply himself to the point put to him by the hon. Member for Horsham (Mr. Hordern) that, with no effective debt remaining and the balance of payments being very strong, there is an overwhelm- ing argument for using this situation to expand the economy?

Mr. Macmillan

I made it clear, in answer to an earlier question, that I regarded the current situation as a base from which to carry out a sustained expansion of the economy. Notwithstanding the right hon. Gentleman's remark, the overall debt of this country, which went up under the previous Administration, has now been wiped out under this Administration.