CLAUSE 21.—(Restrictions on import.) (Hansard, 5 December 1946)

§ Mr. Assheton
Before we dispose of this Clause, would the Financial Secretary or the Solicitor-General tell the Committee some of the reasons why it is in the Bill? A great many people in the country are puzzled to know why the importation into the United Kingdom of notes, which have been issued, and have been legal tender in the United Kingdom, is prohibited. I know some of the reasons which underlie this Clause, but I think it would be in the interests of the Committee and the country in general if this matter were made clear.

§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
Clauses 21 to 23 deal with the import and export not only of goods, but of currencies, currency notes, securities and other valuables. Clause 21 deals with the import of these things, and, except by permission, prohibits them. It prohibits their import by the whole world, not only foreign countries, but also the scheduled territories. The reason is quite simple. If we prohibit export, we must also prohibit import. As the Committee knows, except with permission, a person is not allowed to take valuables, currency notes, gold, and other things abroad. Normally, when going on holiday one makes application and is allowed to take up to £20 in English sterling to help on the return journey between the time of arrival in this country and reaching home. Otherwise, sterling is not allowed to be exported. If we allowed sterling to come in, it would mean that the only people who would benefit would be people who took currency notes out of the country and got rid of them—I will not say on the black market, but, at any rate, in ways which were not strictly legal. Therefore, 539 to stop up that loophole, as we prevent the export, we must also, as a corollary, prevent the import.
We have to remember, too, that when the Armies of liberation were crossing Europe, many currencies began to deteriorate, and all sorts of curious things happened. Until that situation is clearer than it has been up to now—and as the war recedes we hope it will be cleared up —we have to keep these prohibitions not only against the import of sterling notes, but also against the import, again under certain limitations, of other currencies as well. As no doubt the Committee knows, certain currencies are allowed in quite freely. One of these is the United States currency, and the more dollar notes that come in, the merrier. The same applies to Swedish kronor. So far as the French franc is concerned, I think up to 4,000 are allowed in on the person of any one traveller. I forget for the moment how many Belgian francs one can bring in.
I think, speaking from memory, it is about 400, and so many Norwegian kroner can come in, and so on. That is the situation today, and the reason why these prohibitions have to be applied. We are only too anxious to assist foreign tourists who come here. They can bring letters of credit, and travellers' cheques, and things of that sort, which can be translated into cash when they reach here, but we have to make these prohibitions as far as carrying currency and gold is concerned.

§ Colonel Crosthwaite-Eyre (New Forest and Christchurch)
I am not at all sure why, under Subsection (1, a) it says: any notes of a class which are or have at any time been legal tender in the United Kingdom or any part of the United Kingdom; I admit that that is a very nice, sweeping phrase, but, as I see it, if one is abroad and is given a Charles I penny one cannot bring it back into this country. Similarly, if one brought back a William III note, which is one of the first notes issued by the Bank of England, one might be arrested, although the note had been kept in the family as an heirloom. Although I am certain that hon. Members in all parts of the Committee are agreed that this provision is very important if we are to have exchange control, I ask the Financial Secretary whether it is really 540 necessary to have the Clause quite so widely drawn. I can see that it is necessary in regard to legal tender, but why should something which is not legal tender be stopped when it is of no possible value, except perhaps of rarity value? That, I think, is dealt with under a quite different regulation, and has nothing to do with the currency regulations.
Is it the intention of the Government that the present Order governing the amounts of currency that may be brought in will be retained by the Government when they come to issue the general Order under Clause 21? Why is it thought necessary to include under (1, d) any certificate of title to any security, including any such certificate which has been cancelled, Why should it not be possible to bring in a cancelled certificate? Is it because the Treasury are frightened of fraud being exercised, or that importation of such certificates may have a rarity value? I cannot see any real reason for the provision. I would be grateful if the Financial Secretary would have a look at it again, and see whether he cannot make the Clause a little less wide and all-embracing. It seems to cover a great many things which the Treasury cannot wish to cover for any known purpose of exchange control.

§ Mr. Eccles
I know the Financial Secretary is trying to help the Committee, but I must put to him one or two questions about his argument. In the first place, he said that the Armies during the war had parted with pound notes and ten shilling notes to people on the Continent and that, therefore, a lot of notes were circulating on the Continent, and we were not going to have them back. That is not a very creditable argument. If our troops have given British notes in the course of their campaign to persons in the liberated territories, it seems to me that we ought to take them back again, and give value for them. In fact, what is happening is that the pound notes are selling at a rather disgraceful discount in some markets.

§ Mr. Glenvil Hall
That is the answer.

§ Mr. Eccles
The Financial Secretary also said that if we prohibit the export of anything, we must also prohibit its import. That is a most unfortunate phrase. He has only to look at Clause 22 to see that we prohibit the export of gold, 541 but we do not prohibit the import of gold under Clause 21. When I first read Clause 21 I could not help laughing, because there the Chancellor of the Exchequer is prohibiting the import of all the bits and pieces of paper he is creating in this country at such a rapid rate, and yet allowing gold to come in here without so much as a "by your leave." I appreciate the sentiment, and that he really understands that that metal is worth a great deal more than the bits of paper he will not allow to come in. He takes the view that as soon as his children have left home he does not want to see them again, but, if it is a question of gold, let us have as much coming in as we can. What is the reason for leaving gold out of Clause 21, but putting it into Clause 22?

§ Mr. Howard
I wish to ask the Financial Secretary about the final words in paragraph (d): … and any document certifying the destruction, loss or cancellation of any certificate of title to a security. I quite foresee such a document being very necessary. I cannot see why its importation should be wrong.

§ Mr. C. Williams
What is precisely the meaning of Subsection (2), which says: In this Section the expression 'note' includes part of a note and the expression 'security' includes a secondary security"? Are we to be prosecuted or imprisoned because we happen to have a little bit of an old note, or one of the millions of marks of old German currencies which have been used as wallpaper, and which by some chance one might have in one's possession, perhaps wrapped round an old boot? I do not expect that the whole Cabinet would allow a provision like this to go into the Measure. If there is any reason for it, perhaps it is that currency is so bad that they are afraid of the worst and the lowest currencies in the world competing with us. Otherwise, I cannot understand it.
Then there is the Subsection to which my hon. Friend the Member for Westminster, St. George's (Mr. Howard) referred, which includes: any document certifying the destruction, loss or cancellation of any certificate of title to a security, is hereby prohibited. Why on earth should some interesting, but valueless, document of that sort not be brought in without a new declaration? 542 Most of this Clause seems quite meaningless. If necessary at all, it could have been drawn simply, and not in such a way as to prohibit people bringing into the country quite interesting, but valueless, documents. I ask the Financial Secretary whether it is not carrying things too far, and acting rather ridiculously to introduce this prohibition?

§ Mr. Glenvil Hall
We do not think it is ridiculous. I would like to say in passing that the wording of these Clauses has been carefully scrutinised. It is our belief, and we hope the Committee will share it, that what is here, is necessary. We are not asking for any restrictions which are not, in the view of the Government, essential to protect the exchange position of this country. I was asked a number of questions. I shall answer the main points put to me so far as I have apprehended them. One question was why we did not prevent, under this Clause, the importation of gold, since, under Clause 22, we prevented its export, The answer is simple. We can take all the gold that comes here. I think I indicated in my first answer that we welcome all the dollars that come, because dollars are useful, and we can exchange them, and use them abroad again for the value which was placed on them when they came here. The same most decidedly applies to gold. It applies at the moment to Swedish kronor. Any one with Swedish kronor can bring them here, and we will use them. That is the simple answer to the point put by the hon. Member for Chippenham (Mr. Eccles).
I was also asked why a phrase had been inserted dealing with notes which had ceased to be legal lender. The point was made, "If they have ceased to be legal tender, why worry? "The answer is that certain notes which were legal tender before and during the war, have now ceased to be legal tender in this country—such as the £100 note and certain issues of £5 notes, which were called in. Scottish and Irish notes circulated quite freely in this country during the war, but do not circulate now, except by leave of the bank, or by way of payment of commission to the bank for having to collect them for Scotland or Ireland, as the case may be. All these notes, in the case of Bank of England notes must be honoured by the bank, and current notes 543 issued in exchange for them. Because the notes are not legal lender, it does not mean that they are of no value. We have to watch contingencies of that kind, and make provision for them in this Clause. Also—and this is perhaps no small point—Customs and Excise officials at the ports are extremely efficient, but they do not always know, when they see a note, whether it happens to be legal tender, or has ceased to be legal tender. It is unfair to put on them the onus of stopping it there, especially as the notes if they are sent here and properly declared can be exchanged in the ordinary way for their full value at the Bank of England.
I was asked to deal with Subsection I (d). The query was, what were the certificates which had been cancelled and which we wanted to prohibit? This deals with a loophole which might be used, and which we want to stop. It is possible for two people to act together, one in this country and one abroad, and between them to say that a certificate of title to a security had been burned. In fact, they might deliberately burn it, and go to the registrar or, in the case of a bearer security, to the proper authority, and claim that a new certificate or new bearer security should be issued to replace the one which had been destroyed. By that means it might be that the real owner would be undiscovered. The recipient in this country might be placed as the owner of that security by a trick, through connivance between himself and some one abroad. We want to stop that loophole if we can.
The hon. Member for Torquay (Mr. C. Williams) asked why we should prohibit half notes from coming in. The answer is a simple one. It would be possible— if it were legal to send half notes—to send one half of a note by one post and the other half by a post next week. The Bank of England deal with notes, even if they are cut in half. In the old days the practice was known of sending a half a note by one post and the other half by another, and when these were stuck together the Bank, or any one would accept them as if they were whole. We want to stop that. That covers most of the points raised, and I hope that we may now have the Clause.