HC Deb 17 July 1963 vol 681 cc64-5W
Mr. F. M. Bennett

asked the Secretary of State for Commonwealth Relations whether he will provide easier terms for loans to Pakistan and India.

Mr. Sandys

Yes. The House will know that at recent meetings of the aid Consortia held under the aegis of the International Bank, we agreed to make available additional aid under Section 3 of the Export Guarantees Act, 1949, amounting to £30 million to India and £8 million to Pakistan.

The repayment of these loans, as of those previously made to India and Pakistan, will be over a period of 25 years including a grace period of seven years in which no repayments of principal will be required. We have now agreed that in view of the special development needs of India and Pakistan, there should in addition be a waiver of the interest due during the first seven years of the life of these loans.

This further concession represents a substantial easement of the terms of our aid to India and Pakistan.

The cost of the waiver of interest will be borne on the Commonwealth Grants and Loans Vote. Payments will be made from that Vote to the Acquisition of Guaranteed Securities Fund—which is administered by the Export Credits Guarantee Department—in order to recompense the Fund for the interest waived. Parliament will be asked in due course to approve a Supplementary Estimate in respect of the current financial year. Meanwhile, if necessary, an advance will be obtained from the Civil Contingencies Fund.