HL Deb 18 December 1968 vol 298 cc804-6

2.46 p.m.

LORD BOOTHBY

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what was the sterling cost of the capital value and servicing of the American Loan in 1946; and what is the comparable cost now.]

LORD BESWICK

My Lords, repayment of the United States Line of Credit commenced in 1951, in which year the cost of interest and principal repaid was £42,620,089. The current cost, including interest on deferred repayments is £53,293,389. The original value of the loan was £931 million. The amount now outstanding is £1,262 million.

LORD BOOTHBY

My Lords, arising out of the reply by the noble Lord, Lord Beswick, may I ask him whether he does not agree now that I was right in moving the rejection of this Loan in another place in December, 1945?

LORD BESWICK

My Lords, I have taken the trouble to look at Hansard for that period. I remember that I myself was very doubtful. I could not remember whether I supported the noble Lord, or whether I went in behind my own Government.

LORD BOOTHBY

I think you supported me.

LORD BESWICK

My memory was refreshed by Hansard. I remember the great appeal by Mr. Ernest Bevin, the Foreign Secretary, who said [OFFICIAL REPORT. Commons, 13/12/45. col. 736]: … now is the time for us to put our shoulders to the wheel and help this old country through as we did on that occasion."— that was the war through which we had just come. I should not like to say which of us had failed to put enough behind the wheel.

LORD CARRINGTON

My Lords, while congratulating the noble Lord on his homework, may I ask him how much money was paid in servicing this loan between 1951 and 1964?

LORD BESWICK

My Lords, I cannot give the noble Lord that amount between those two years. I can give the total amount. What I can say is that in 1956 the interest was not paid, and in 1957 neither the interest nor the principal was repaid.

LORD CARRINGTON

My Lords, how much has been paid of the loan in sterling?

LORD BESWICK

My Lords, the total paid is 1,900 million dollars in interest and principal including some Lease-lend. The total paid to last year of the loan is the equivalent of £596 million.

THE EARL OF DUNDEE

My Lords, did not the noble Lord say in his original Answer that the present amount owing is greater than the amount originally borrowed in 1946?

LORD BESWICK

My Lords, that is so. That is the fact and the noble Earl can draw what conclusions he likes from it.

LORD LEATHERLAND

My Lords, does not my noble friend think that exactly the same state of affairs prevails in regard to those very worthy institutions, the building societies, where a person pays back his interest and loan year by year and suddenly finds himself owing more than he originally borrowed?

LORD BESWICK

My Lords, this is the case to a certain extent. The fact is, though, that having paid a certain amount, and having engaged in a contract with a building society, normally one is left with the use of a house. The fact of the matter here is that we were paying for having done so much, both for the United States and ourselves, in winning a 'war in our common interest.

LORD BALFOUR OF INCHRYE

My Lords, since the noble Lord has gone back a good many years, may I ask him this question? Can he say what proportion of the outstanding debt is represented by the original purchases of American tobacco and by the importation of foreign films, both of which could have been avoided had we not taken that loan?

LORD BESWICK

My Lords, I take the point and there was a great case made. I remember Hugh Dalton saying that we had to switch to Rhodesian tobacco instead of Virginian leaf, and to some extent we did that. But the real reason, of course, why the amount is higher now than it was is because at the time the rate of exchange was 4½03 dollars to the pound. It then went down to 2½80 and is now 2½40.