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Anglo-Russian Trade Agreement

Volume 446: debated on Tuesday 27 January 1948

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asked the Chancellor of the Exchequer what is the loss incurred to this country under Article V (II) of the Anglo-Russian Trade Agreement.


asked the. Chancellor of the Exchequer if he is now in a position to state the financial terms involved in the Commercial Treaty recently signed with the Soviet Union; how they compare with previous agreements on this subject; and what is the estimate of the net loss to this country.

The terms of the Agreement have been published in Cmd. Paper 7297. They involve a reduction of interest on amounts advanced by His Majesty's Government under the Civil Supplies Agreement of 1941 from 3 per cent. to ½ per cent. per annum and an extension of the period of repayment from seven years to fifteen years for roughly 70 per cent. of the total claim.

The net loss in interest in connection with this Agreement is approximately £4 million. There is no reduction of capital. His Majesty's Government have also waived their claim to repayment of other claims and services to the Soviet Union during the war, to a nominal value of about £27 million. His Majesty's Government accept the contention of the Soviet Government that these costs were an integral part of the common war effort.

Will the Chancellor of the Exchequer kindly explain how these terms differ from those which he denounced on 28th July in this House, saying that, in view of the serious overseas financial position, we could not possibly afford to accept them?

I did not denounce any terms. I explained why, at that stage, we were not prepared to accept these particular terms. Owing to the changing circumstances of the supply position, we were later prepared to accept them.

Will the right hon. and learned Gentleman remember that here he is scaling down debts owed to us, and will he not press other countries to scale down theirs?

Does not the right hon. and learned Gentleman agree that he has paid a very heavy price for this agreement?

I do not think that it is a very heavy price. I think that it is a fair price for what we have got.

Can the Chancellor say to what extent the terms of the agreement will be changed by the devaluation of the franc?