HC Deb 12 April 1976 vol 909 cc417-8W
Mr. Cartwright

asked the Minister for Overseas Development if Her Majesty's Government intend to contribute to the International Monetary Fund subsidy account to reduce the interest on drawings under the 1975 oil facility by the 45 most seriously affected countries.

Mr. Prentice

Yes. We supported the endorsement by the IMF's Interim Committee in July 1975 of recommendations that an account should be established with appropriate contributions by oil exporting and industrial countries to reduce the burden of interest payable by the most seriously affected members on their drawings under the oil facility. We intended to contribute provided a reasonable number of other countries did so. The full scheme initially envisaged, involving a balanced burden-sharing among donor countries, has not been achieved, but most OECD countries and some oil exporters have already made, or committed, contributions of the whole or a proportion of the amounts originally proposed for them. Drawings under the facility itself have now been completed, and the IMF has asked that lump sum contributions or initial instalments should be made by the end of this month.

We propose to contribute the present equivalent in sterling of SDR 12.05 million, that is, half the share envisaged for Britain under the original scheme. This will be paid in seven annual instalments, at the estimated rate of use of the subsidy account, namely, one-fifth for each of the first three years, then falling during the next four years to just over 3 per cent, in the final year. The first instalment will be approximately £1.45 million and a Supplementary Estimate to cover this, which will be by way of grant in aid, will be submitted in due course. In the meantime, provision will be made from the Contingencies Fund.