HC Deb 12 March 1953 vol 512 cc140-1W
70. Mr. Simon

asked the Chancellor of the Exchequer why he has refused the request of the New Zealand Government to float a loan in the city of London to defray the cost of the construction of a bridge over Auckland Harbour by Messrs. Dorman Long and Company.

Mr. Maudling

The reasons why we were unable to meet the request of the New Zealand Government have been set out very fully in a personal message from my right hon. Friend to the Prime Minister of New Zealand. I am circulating in the OFFICIAL REPORT the text of this message, which has also been released for publication in New Zealand.

Following is the message:

I have given very full consideration to your message in which you ask whether the Auckland Bridge Authority may raise on the London market an issue of £4½ million for the construction of a harbour bridge.

I note that the project has the support of the New Zealand Government, which proposes to guarantee principal and interest and I would naturally wish if at all possible in such a case to say that the facilities of the market will be at your disposal. You will I am sure realise, however, that in the present congested state of the market, and with the heavy burdens which the United Kingdom has to bear, I am bound to scrutinise with care all applications, even where sponsored by my Commonwealth colleagues, from the point of view of the contribution which they can make to the strengthening of the sterling area. You will remember that we agreed to your raising £10 million on the market for the Murupara scheme, which offered prospects of substantial savings of foreign exchange. It is very difficult to see how the Auckland Bridge project, however meritorious in other respects, can make any appreciable contribution, either directly or indirectly, to this end. It seems to me to fall into the category of projects which are highly desirable in themselves, but which we in the United Kingdom cannot afford to finance, even in part, at present. There are a number of very similar projects which we have under consideration in this country, which have been worked out in great detail and which are supported by strong arguments both of public convenience and of economic advantage. We have reluctantly decided that these many schemes must wait until times are easier, and I could certainly not consider allowing money to be raised in London to finance them at present.

In the Communiqué issued at the conclusion of the recent Commonwealth Economic Conference, we recorded our agreement that development should be concentrated on projects which directly or indirectly contribute to the improvement of the sterling area's balance of payments with the rest of the world. It was on that understanding that the United Kingdom felt able to promise the Conference that it would, notwithstanding its existing heavy commitments, make a special effort to provide additional capital for Commonwealth development, and, as I told the House of Commons on 3rd February, I have asked the Chairman of the Capital Issues Committee to take the terms of our undertaking to the Conference into account in considering applications to raise capital on the London market. I do not feel that the Auckland Bridge project comes under the terms of this undertaking.

In these circumstances I hope that you will think it fair not to press me to agree to money being raised for this project in New Zealand, when I can certainly not agree to money being raised for a similar purpose in the United Kingdom, and when I cannot see my way to accept it as coming within the framework of the undertaking which I gave at the Conference. I very much regret having to send this answer to your request, but I am sure you will appreciate that I must do so in these times of difficulty and stress.