HC Deb 27 February 1940 vol 357 c1895
50. Mr. Wilmot

asked the Chancellor of the Exchequer whether, in view of the failure of the depreciation of sterling at the beginning of the war to bring about an adequate expansion of exports, he will give an assurance that, in view of its grave effects in other directions, currency depreciation will not again be resorted to as a means of stimulating exports?

Sir J. Simon

I can assure the hon. Member that currency depreciation will not be resorted to as a means of stimulating exports by seeking an unreasonable competitive exchange advantage. I cannot accept his implication that this policy was adopted on the outbreak of war, for this is not the case.

Mr. Wilmot

If that be the case, may I ask for what reason depreciation was resorted to in the early months of the war?

Sir J. Simon

I think I should say that the true level of sterling was below that at which it stood in the period prior to the war, and at the outbreak of war we felt it was a wise step to allow the pound to fall to a rate which did represent its true economic level.