HC Deb 21 December 1944 vol 406 cc1975-7W
Sir L. Lyle

asked the Chancellor of the Exchequer if he is now in a position to inform the House about the arrangements concluded recently by Lord Keynes in Washington under which the United Kingdom is required to pay cash for American goods formerly financed under Lend-Lease.

Sir J. Anderson

As stated by the Prime Minister on 30th November, the new Lend-Lease programme to come into effect after the end of the war with Germany will be at a rate not much more than half of what we have been receiving in 1944. This prospective reduction in the scalp of Lend-Lease after the defeat of Germany, and while the war with Japan continues, is due to three causes:

  1. (a) a reduction in our requirements;
  2. (b) our capacity to produce more for ourselves; and
  3. (c) the removal of certain articles and materials from the Lend-Lease list.

Of these factors, the first is, of course, the main explanation of the expected reduction. After the defeat of Germany our requirements from the United States in the shape of supplies for the Armed Forces and of materials for the manufacture of such supplies will be considerably below the current level.

There remain a number of items within our munitions requirements which, on any reasonable distribution of our combined production resources, can only be made in the United States. As a result, however, of (b) above we have been able to arrange that we shall make ourselves, a higher proportion of some of our requirements in the case of articles which can be made equally well in both countries. This also will lead to a reduction in our requirements on balance.

As regards (c) to which the hon. Member's Question is more particularly directed, there are, as already explained, certain articles previously obtained on Lend-Lease and still required to be imported into the United Kingdom from U.S. sources, for which we shall henceforward pay cash. These comprise a number of miscellaneous manufactured articles and materials. But, after allowing for the reduction in the scale of some of our requirements, the amount of money likely to be involved is not considerable.

Hon. Members should appreciate that Lend-Lease has never covered anything like the whole of our requirements for goods and services in the United States. In spite of the large over-all reduction in the Lend-Lease programme which has recently been agreed to come into effect, we hope for a decrease, rather than an increase, in the U.S. dollar expenditure which we have to meet from our current dollar receipts and other resources. Of our current dollar receipts the dollar equivalent of the pay of the U.S. Forces stationed in the sterling area is much the most important element.

Thus, when everything has been taken into account it would be a serious misunderstanding of the effect of the recent agreed changes in the prospective Lend-Lease programme to believe that the substantial reduction in view, taken in conjunction with our undertaking to pay cash for certain items previously obtained on Lend-Lease, will have the effect of causing an increased drain on our gold and dollar resources to pay for purchases in the United States. This, it will be seen, is the opposite of the fact.

In arranging the new programme careful regard has been had to the nature of the goods which we are likely to be in a position to use in export as resources become available with a view to cutting them out of the Lend-Lease list, as is only reasonable. As a result of this, we hope that there are no potential exports of any importance likely to be affected by any restrictions arising out of Lend-Lease. Any exporter who is in doubt about his position should make inquiry of the Board of Trade, but he must remember that it is only as existing shortages of labour and material are overcome that the freedom to export which we have secured will become gradually effective.