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Balance Of Payments (Marshall Aid)

Volume 480: debated on Thursday 9 November 1950

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asked the Chancellor of the Exchequer what special steps he is taking to enable payment to be made for the 13 per cent. United Kingdom imports, which in 1949 were free of cost under Marshall Aid and included one-third of all our wheat, flour and sugar, four-fifths aluminium, two-fifths raw cotton and one-half tobacco; and if he is satisfied that the action he is taking will prevent lower rations and unemployment when Marshall Aid ceases.

Since the end of 1949, the gold and dollar receipts of the sterling area have exceeded expenditure, before taking account of receipts under the European Recovery Programme. The sterling area has therefore been paying its way with the dollar area during 1950 irrespective of receipts under E.R.P. The continuance of a favourable balance of payments with the dollar area when Marshall Aid ceases will depend on the maintenance of a high level of sterling area exports to the dollar area and on continued economy in sterling area dollar expenditure. The policy of His Majesty's Government continues to be directed to these objectives. To fulfil them and at the same time to build up our defences will require the highest possible level of production and the sacrifice of much that we might otherwise have enjoyed, but there is no reason to suppose that the ending of Marshall Aid would give rise to lower rations and unemployment.