§ Mr. Staintonasked the Chancellor of the Exchequer what is his estimate for the financial years 1980–81 and 1981–82 of the implications for (a) the Exchequer and (b) the United Kingdom balance of payments of the settlement in Zimbabwe.
§ Mr. LawsonThe estimated cost to the Exchequer in 1980–81 resulting from the settlement in Zimbabwe is about £19.3 million, including aid, military training and the residual costs of the supervision of the ceasefire and election in Zimbabwe. Parliamentary approval will be sought for further expenditure on aid and military training in 1981–82. It is not possible to estimate the amount at this stage.
United Kingdom exchange controls on transactions with Rhodesia were discontinued in November 1979. The first budget of the independent Government of Zimbabwe in July 1980 ended discriminatory exchange control on remittance of current profits and dividends—that is, those earned in financial years ending on or after 31 March 1981—to residents and parent companies in, the United Kingdom. Funds accumulated during UDI remain blocked. These changes in exchange control regulations in the United Kingdom and Zimbabwe can be expected to affect flows across the exchanges. But it is not possible to give any accurate estimate of the overall balance of payment effect.
Following the independence settlement, agreement was reached between the Government of Zimbabwe and Her Majesty's Government on settlement of official debt outstanding since 1965. Her Majesty's Government have agreed to write off £22 million of debt. The remainder, amounting to some £33 million, has been rescheduled for payment at a later date. Agreement was also reached between the Government of Zimbabwe and the Council of Foreign Bondholders on the terms of payment proposed for United Kingdom holders of Government of Southern Rhodesia stocks.