HC Deb 23 March 1964 vol 692 cc3-4W
Sir T. Beamish

asked the Secretary of State for Foreign Affairs whether Her Majesty's Government, as members of the Turkish consortium of the Organisation for Economic Co-operation and Development, and, in view of the assistance which they gave to Turkey in 1963, will grant further assistance to Turkey during 1964.

Mr. R. A. Butler

Her Majesty's Government have announced in the Turkish Consortium of Organisation for Economic Co-operation and Development their intention to provide aid to Turkey in 1964 amounting to approximately £3,850,000. This is almost exactly the same as the amount of aid provided by the United Kingdom last year. Of this sum, £3 million will be in the form of a loan under Section 3 of the Export Guarantees Act, 1949, and the remainder in the form of the postponement of certain debt payments due from the Turkish Government to Her Majesty's Government in the course of 1964. It is hoped that the necessary agreements will be signed shortly.

The Section 3 loan for £3 million will be for 25 years. For the first 7 years no repayments of capital will be required and interest payments will be waived. The terms will thus be the same as those fat the second 1963 loan to Turkey, which were explained by my right hon. Friend the then Lord Privy Seal in answer to the hon. and gallant Member's Question on 2nd August, 1963, and will be accorded for the same reasons, namely, Turkey's development needs and acute balance of payments problems.

The cost of the waiver of interest will again be borne on the Foreign Office Grants and Loans Vote. Payments will be made from that vote to the Acquisi- tion 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 vote a Supplementary Estimate. Should it prove necessary, an advance will be obtained from the Civil Contingencies Fund.

Her Majesty's Government have accepted the proposal put forward in the Consortium for a contribution towards reducing Turkey's foreign exchange requirements by the postponement of repayments of capital and payments of interest due over the next five years from Turkey to certain members of the Consortium (including the United Kingdom) in respect of loans made in support of the 1958 Turkish Stabilisation programme. Accordingly, each repayment of capital and payment of interest due from 1st January, 1964, onwards, under the Anglo-Turkish Loan Agreement of 1958 (Cmnd. 615), will be postponed by five years, and no interest will accrue in respect of the postponement. For 1964, the result will be to excuse the Turkish Government from paying a total of approximately £850,000.

Her Majesty's Government have also announced in the Consortium that they are willing, by means of loans under Section 3 of the Export Guarantees Act, 1949, to lend up to £3 million to Turkey towards the cost of suitable development projects under the Turkish Five Year Plan 1963–67. This expenditure would probably be spread over a period of years.