§ Lord Laird
asked Her Majesty's Government:
Whether they owe money to the United States Government as a result of World War Two debt: if so, how much is owed; when it will be repaid; and what representation they have made to the United States Government concerning the debt being cancelled. [HL4422]
§ Lord McIntosh of Haringey
Under a 1945 agreement, the United States Government lent the United Kingdom a total of $4,336 million (around £1,075 million at 1945 exchange rates) in war loans. These loans were taken out under two facilities:
- (i) a line of credit of $3,750 million (around £930 million at 1945 exchange rates); and
- (ii) a lend-lease loan facility of $586 million (around £145 million at 1945 exchange rates), which represented the settlement with the United States for lend-lease and reciprocal aid and for the final settlement of the Financial claims of each government against the other arising out of the conduct of the Second World War.
Under the agreement the loans would be repaid in 50 annual instalments commencing in 1950. However, the agreement allowed deferral of annual payments of both principal and interest if necessary because of prevailing international exchange rate conditions and the level of the United Kingdom's foreign currency and gold reserves. The United Kingdom has deferred payments on six occasions. Repayment of the war loans to the United States Government should therefore he completed on 31 December 2006, subject to the United Kingdom not choosing to exercise its option to defer repayment.
As at 31 March 2001, principal of $346,287,953 (£243,573,154 at the exchange rate on that day) was outstanding on the loans provided by the United States Government in 1945. The Government intend to meet their obligations under the 1945 agreement by repaying the United States Government in full the amounts lent in 1945 and so no representation has been made.