HC Deb 05 December 1946 vol 431 cc534-6

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Eccles

If I understand aright, this is the Clause under which the Treasury could, if they were willing, permit the United Kingdom holder of a dollar security to sell it and buy another dollar security, an operation which is known as "switching". I wish to ask a question about this so that the Chancellor can answer it on Clause 31. At the present time, the British holder sells and the dollars have to be taken into the pool, and he is not allowed to exercise his judgment and buy something else. I consider that very hard, because British investors have had a long training in the art of investing, and it is unreasonable that they should not be allowed to sell one American security and buy another, especially now that the vesting order is off. I hope the Chancellor will be able to confirm or deny this—I am told that the reason why switching is not to be permitted is that His Majesty's Government signed our rights away in connection with the Canadian and United States loans. I am told that the Canadians and Americans say that when a British holder sells an American security, they want the dollars straight away in the pool. If that is so, it is serious, because it means that we have given away what is, in my judg- ment, a reasonable thing to retain. I should like to know whether the refusal to permit switching of dollar securities is in fact due to the requirements of the Canadian or United States Governments.

4.45 p.m.

Mr. J. S. C. Reid (Glasgow, Hillhead)

It seems to me that this Clause goes even further than the case mentioned by the hon. Member for Chippenham (Mr. Eccles). I do not speak as an expert, but I think we ought to be told what is behind this Clause. Obviously there is something but I do not know what it is. The Clause is extremely harsh in its terms. It says that the Treasury may make an Order overnight—and may I remind the Committee that this is not in Order which will be laid before Parliament—saying that a certain security shall not be transferred by any person who holds it in the United Kingdom, although he wants to sell it to someone else also in the United Kingdom for sterling. I hope that the Solicitor-General can clear up this point. I am not sure whether the Clause is so wide as to prevent an executor transferring a security to the beneficiary. This looks to me to be something put down as a stopper before something else happens, as though this were a means of stopping dealings in a particular named security in order that the Government may take some further steps later on. I cannot suppose that this embargo is to last very long. There may be a purpose in having a temporary embargo. Perhaps the right hon. Gentleman will tell us what it is, and will assure us that it is purely temporary, and is not intended to hamper dealings over a prolonged period.

Mr. Birch

In this Clause a different formula is used from that which appears elsewhere. It starts by saying: the Treasury nay, if in their opinion there are circumstances rendering it necessary or expedient so to do, by order direct…. Everywhere else it says that "the Treasury may direct." I wonder why they can only direct if it is necessary and expedient so to do in this case, and direct in other cases even when it is unnecessary and inexpedient.

Mr. Dalton

There is no catch in this which cannot be quite frankly explained. I shall, when I reach Clause 31, say something in more detail as to the remissions and relaxations that will be made, and perhaps I may reserve that part until then. The broad purpose of this is to take care of securities of specially valuable types of currencies. We have our mind on dollars here, as throughout the Bill. The right hon. and learned Gentleman the Member for Hillhead (Mr. J. S. C. Reid) asked if I could assure him that it was only a temporary provision. I would not use that epithet, but it is a provision designed to meet a condition of things which we hope will not last very long. It is a condition, however, which will certainly extend over the next few years, in which we have to watch, with especial care, the movement of our dollar reserve and the general balance of payments in international trade. We have this particularly in mind in this provision. We have to make sure that no good dollars go astray. I will indicate the detailed relaxations at the point I have mentioned.

Mr. Howard (Westminster, St. George's)

May I raise one point which perhaps the Chancellor will consider when he comes to Clause 31? As I read this Clause, it affects also a person who is in the United Kingdom who may be a holder of dollars—or kronor if we take the case of a Swede. It is not utterly inconceivable that a Swede might be negotiating the sale of some of his property which was not quite completed when he came on a visit to this country on other business. While in this country he might receive a cable saying that that sale was now ready for completion. As I understand this Clause, if he sent a cable saying, "Go ahead. Authorise that sale," he would be committing an offence under this Clause and would render himself liable on summary conviction to three months' imprisonment, a fine of £500, and forfeiture of that security. I do not know whether the Chancellor would like to answer that point now—whether I am correct in saying that under this provision, as drafted, that could happen—or whether he would prefer to reserve the point until later.

Mr. Dalton

Under this provision as drafted, that could happen.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clauses 18 and 19 ordered to stand part of the Bill.