HC Deb 22 July 1943 vol 391 cc1069-71
43. Mr. Pethick-Lawrence

asked the chancellor of the Exchequer whether he is now able to make a statement on the exchange rate fixed for the occupied territory of Italy?

Sir K. Wood

The rate of exchange for the lira in those parts of Metropolitan Italy now in the occupation of the Allied Forces has been fixed at 400 lire to £1 or 5o lire to $1. This rate has been fixed in agreement with the Government of the United States and after taking into account, so far as possible, all relevant economic factors. In a case like the present there are obvious difficulties in assessing the relevant factors at their proper value. Neither the official prices and exchange rates on the one hand nor the very different black market prices and exchange rates on the other form a reliable guide. Moreover, the position and prospects of the lira are entirely changed and will continue to be affected by the fact of invasion itself. In the presence of so many imponderable considerations the provisional rate of 400 was fixed.

I may add that it is not proposed to alter the rate of 480 lire to £1 effective in occupied Italian territories in North Africa. This rate is well established and is working satisfactorily. The considerations affecting the African territories are different from those affecting Metropolitan Italy and the two areas can conveniently be dealt with separately.

Mr. Pethick-Lawrence

In view of the transcendent importance of this decision, both for its own sake and for precedent, and of the need for securing public acceptance that it justly represents purchasing power parity, will the Chancellor of the Exchequer consider whether there are any data which he can publish which will commend the acceptance of this figure to the public as a whole?

Sir K. Wood

I will consider that.

Sir H. Williams

Could the Chancellor say what steps have been taken to avoid trafficking between North Africa and Sicily? If you travel the right way, you can make 8o lire to the pound.

Sir K. Wood

That is another matter.

Sir H. Williams

But it is a very important matter. I ask, What steps is the Chancellor taking to avoiding trafficking in lire? It is easy to make a lot of money.

Sir K. Wood

Perhaps my hon. Friend will put that Question on the paper.

Mr. G. Strauss

How are the exchange rates of the pound and the dollar into Italian currency reconciled with the existing exchange rates between the pound and the dollar direct, which is four dollars to the pound?

Sir K. Wood

I have said that there are various factors in this matter. It is impracticable to come, I think, to what you might call a logical conclusion. This is the best decision that has been arrived at by the two Governments.

Earl Winterton

Is the Chancellor aware that the point put by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) represents the view held strongly in different parts of this House, and will he attach the greatest importance to arriving at an eventual decision which will be fair to all parties concerned?

Sir K. Wood

The right hon. Gentleman asked me if I would give some further information on this matter, and I said that I would endeavour to do so.

Sir A. Knox

Is it fair that our prisoners only get 72 lire to the pound?

At the end of Questions:

Mr. Pethick-Lawrence

On a point of Order, Mr. Speaker. Would you permit me to ask the Chancellor of the Exchequer whether there was not an error in the figure he read out in reply to me with regard to the American dollar?

Sir K. Wood

Yes, Sir. I am afraid that when I said 5o lire to the dollar, it ought to have been 100 lire. It was a mistake on my part.