§ Sir T. Beamishasked the Lord Privy Seal whether he will provide easier terms for loans which Her Majesty's Government have agreed to make to Turkey.
§ Mr. HeathYes. Her Majesty's Government are members of the consortium which was set up by the Organisation for Economic Co-operation and Development last year to assist the implementation of the Turkish Five Year Plan (1963–67). The consortium has been considering aid for 1963. On 1st May, 1963, Her Majesty's Government signed an agreement with the Turkish Government for a loan of £2,857,000, and more recently have agreed to make available an additional loan of £1,000,000 for Turkey.
Both loans are being made available under Section 3 of the Export Guarantees Act, 1949. They will be repayable over a period of 25 years, including a grace period of 7 years in which no repayments of principal will be required.
201WThe consortium have also been considering whether they could move towards some easement in the terms of aid to be extended to Turkey. In view of the terms offered by other members of the consortium, and Turkey's acute development needs and balance of payments problems, we have now agreed that there should in addition be a waiver of the interest due during the first seven years of the life of our latest loan of £1,000,000 and a similar waiver of interest on the last £1,072,000 of the £2,857,000 loan made on 1st May.
This further concession represents a substantial easement of the terms of our aid to Turkey.
The cost of the waiver of interest will be borne on the Foreign Office 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, if this is necessary, in respect of the current financial year. Meanwhile, if necessary, an advance will be obtained from the Civil Contingencies Fund.