HC Deb 08 February 1938 vol 331 cc844-5
55. Mr. Craven-Ellis

asked the Chancellor of the Exchequer whether the present rise in the exchange value of sterling is the result of the policy controlling the Exchange Equalisation Account; and whether, in view of the more intense competition which the British producer will have to meet both in the home and overseas markets as a result of the over-valuation of sterling, the future policy of the account will be directed to preventing the sterling rate rising above the level at which it stood when the tripartite agreement was concluded?

Sir J. Simon

The answer to both parts of the question is in the negative. It is not the function of the Exchange Equalisation Account to determine the exchange value of sterling, but to check undue fluctuations therein in accordance with Section 24 (3) of the Finance Act, 1932.

Mr. Craven-Ellis

In checking the fluctuations is more consideration paid to the currency speculator than to British industry?

Sir J. Simon

The matter is considered in relation to general public policy. Violent fluctuations, I should think, are not to the advantage of anyone.

Mr. Bellenger

May I ask whether the Exchange Equalisation Account pays no regard to the exchange itself apart from the fluctuations, and whether there is any arrangement under the Fund for preventing the exchange either depreciating or appreciating too much?

Sir J. Simon

The duty served by the Exchange Equalisation Account is defined in the Act of Parliament.