§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Birch
Mr. Deputy-Chairman, I wish to draw your attention to the fact that there is on the Order Paper an Amendment in my name in page 22, line 42, at the end, to add:Provided that no such exemption shall be granted so as to give to any person any undue or unreasonable preference or advantage.
§ The Deputy-Chairman (Mr. Hubert Beaumont)
In view of the fact that it has been decided to have a full discussion on this Clause, the Amendment has not been called.
§ Mr. Dalton
I agreed with the Committee, and Major Milner, when in the Chair, approved the proposal, that at this stage I should make a statement as to the way in which we propose to make use of the powers conferred not only by Clause 31—the Chairman ruled that we might go rather wider than that—but by any other Clause which may confer the power to make Orders or prescribe conditions for the doing of various acts. I would like to preface the detailed observations I intend to make by again repeating that, speaking very broadly, what we are doing in this Bill is putting into statutory form what till now has been embodied in the Defence (Finance) Regulations. We intend to make orders and give permissions—and I emphasise the distinction between orders and permissions—substantially on lines which have been followed over the past seven years, which have, as is generally admitted, not given rise to any serious accusations of injustice or lack of understanding of the commercial needs of the country.
We must have power, of course, to vary the orders, and permissions at short notice. I have developed this argument before and I merely repeat it in a sentence. We must have power to vary if some unexpected circumstances arise; if it is found, for instance, that some new practice is growing up which is sapping our exchange resources. Therefore, all that I say now is subject to the understanding that, although our intention is to make orders and issue permissions on the lines I will now indicate, if circumstances should change, or new conditions arise, we should need to make changes. I take it that it would not be any breach of the confidence which we are asking from the Committee, if such changes, for good cause shown, were made.
After those preliminaries, may I distinguish between orders made by the Treasury, which, of course, are not confined to those under Clause 31, and what may be called permissions? I will deal first with the permissions, which are somewhat different from the orders but which, I think, will be of equal interest to the Committee. Not all the reliefs to be given 798 by the Treasury under this Bill, when it is an Act, will be published as orders. Many of these reliefs will be effected by way of administrative permissions which will go to banks, travel agencies, and so forth. There is nothing in any of these permissions which we shall wish to hide. On the other hand, many of them will be of a very limited and personal character and we do not wish, therefore, to publish them needlessly. We are, however, quite prepared to publish anything which it is reasonable should be published and we have no desire to be secretive about permissions.
On the question of how that can best be effected, I am prepared to act in accordance with suggestions which may be made to me. I would merely say that our practice has been, and will continue to be, to make general permissions available to newspapers which follow these things—to "The Times" and the "Financial Times" and any other organs of news which are interested. Nor should I resist, in any particular case, the placing of any notice in the Library of the House if it really were thought, by any hon. Member who seriously studies these things, to be of sufficient interest. There is no resistance to publication but I think there should be some limit placed upon it, particularly as many of these will relate to particular persons.
The permissions will be circulated to all the persons concerned by the Bank of England on behalf of the Treasury. Most of them will be in a running series known as "F.E." or foreign exchange notices. Similarly, a great number of applications for foreign exchange are made upon standard forms, as many hon. Members know. These forms are stamped either "approved" or "not approved," as the case may be, by the banks, working under the authority delegated to them, or by the Bank of England itself. A very large number of individual transactions in this field are dealt with in this way. The administrative technique of the permissions, as I call them, will continue unchanged. It covers a very large part of the field in which reliefs are given. I emphasise this in order that we should not get too disproportionate a view of the orders as distinguished from the administrative permissions with which, till now, I have been dealing.
799 The orders may be made under any Clause in this Bill where there appears the formula, which is repeated fairly often, "Except as specified or prescribed by the Treasury" such and such a deed may not be done. Wherever that is said, a Treasury order may be issued. It may be needed; it may be issued. To take one example, an order will be needed to specify currencies under Clause 2. There is a relevance here, as hon. Members who have studied the Bill will have noted, to the provisions of the Sixth Schedule. It is there laid down that certain classes of orders are not required to be laid before Parliament. Hoping to create a spirit of sweetness and light in the Committee, I say at once that my mind is not completely fixed on the contents of the Sixth Schedule. When we come to it, it may be that we will hear the arguments and come to a decision. Arguments have been adduced already, in passing, as it were, on some of these points. I am by no means rigidly convinced that we need keep the Sixth Schedule exactly as it stands. We will consider proposals for omitting from the Sixth Schedule one or other of its provisions. There must be a Sixth Schedule with something of this character. It would be absurd to require every detail to be put before Parliament but there is a zone of doubt which I shall be very glad to explore when we reach that point.
The principal orders due to be made under Clause 31 will fall into three groups. This, substantially, will follow the present practice. There will be orders relating to payments, securities and travellers to and from the United Kingdom. I am afraid this is a little detailed but I think it is the information which the Committee wants. Those will be the three main divisions of the orders—payments, securities and travellers. With regard to payments, the existing order, which we shall substantially reissue, permits a non-resident to make the following payments. First, it permits him to pay a resident of the sterling area any sum without limit of amount. We shall continue that. Second, it permits a non-resident to pay another resident of his own monetary area; and, third, if this person, legally a non-resident, happens to be in the United Kingdom for a short time—not long enough to change his residence—he will be permitted to draw cash from his own account 800 and to spend it in the United Kingdom without limiting the amount. These liberties are all contained in the present order and will all be continued; in fact, they all legitimise the transfer of sterling. That is the common feature of them all.
Further than that, we propose that the following facilities shall be given. A nonresident will be allowed to spend freely in this country any sterling, notes or cash, of which he is lawfully in possession, whether he imported them—there is a legal limit of £20 for sterling notes—whether he cashed a cheque or a travellers' cheque, or whether he changed foreign currency with an authorised dealer in this country. I will say a word about travellers' cheques in a moment. In all these ways he may obtain sterling. This covers the case raised by the hon. Memberfor the Combined English Universities (Mr. H. Strauss), about the American who wanted to give his wife money with which to go shopping. The provision which I have just indicated will make that possible. We have no desire to make things difficult for non-resident visitors to this country, American or others.
The provision that I have just been summarising, permitting the non-resident to spend in this country sterling legally acquired by any of these means, will be made specifically clear in the new order. I am not quite satisfied with the present order; I think that it is, perhaps, obscure, and we hope to remove the obscurity and make it clearer that all these spendings by non-residents of sterling are permissible. Further, there was the question about bus fares and bridge winnings. We will try to meet that problem also. We propose to make it permissible for a resident to make cash payments to nonresidents who happen to be in the United Kingdom. There will have to be certain limits, but within those limits, which will be put into the order, we shall make it possible for such cash payments to be made in the United Kingdom. We have in view the payment of debts arising from bridge or any other game of chance.
§ Mr. Dalton
The tax must fall if it is prescribed upon any taxable transaction. So far, I have been speaking about the section of the order relating to payments both by residents and non-residents. The details have yet to be worked out, but I 801 hope that the lines which I have indicated will be both intelligible and generally approved. They continue the present arrangements, except in certain particulars where they make the present arrangements more explicit than they now are.
With regard to securities, there will be orders relating to the handling of securities. Perhaps I may divide that, again, under two heads. We propose to make orders—and this also applies to permissions—which will remove transactions, elsewhere in the scheduled territories, from nearly all the provisions of Part III of the Bill which, otherwise, would impose restrictions upon them. It is our general purpose to remove the great majority of transactions which take place within the scheduled territories from the limiting provisions imposed on them by Part III. We shall allow payment of capital monies outside the United Kingdom where the recipient is inside the scheduled territories. We shall also exempt from Clause 15—which the Committee will recall requires securities to be deposited with an authorised depositary—any securities which are on a register in a scheduled territory.
For example, let us take Kaffir shares of South African goldmining companies. If these are registered on a South African register, we shall not require them to be deposited with an authorised depositary here—I give that as one illustration, but there are many others—provided that we know that these securities are somewhere within the scheduled territories. We are equally content to know that they are in safe keeping, whether in South Africa, Australia or even in the Faroe Islands, provided always—and this is a proviso which I hope there will be no difficulty in getting satisfied—that we have adequate arrangements for cooperation with the exchange control in the other Scheduled territories concerned. Provided that we and the South African Government have a satisfactory understanding about the operation of our respective exchange controls and their interlocking, we shall be perfectly content to allow these securities to be registered in South Africa and not here. As I said earlier, in reply to a question, we have, so far, no reason to doubt that we shall have cooperation with the other Governments in the various scheduled territories in this and other matters relating to exchange control.
802 With regard to securities—and this is another point which, as I have explained before, is a relaxation of the present operations under the Defence Regulations—we shall embody in the order all that remains, which is not a great deal, of Regulation 1 (1) of the Defence (Finance) Regulations which originally gave power to the Treasury to acquire by compulsory purchase dollar and other securities. We have, as the Committee clearly understands—the matter was discussed at an earlier stage—given up the requirement of compulsory purchase by the Treasury, but we still need to control the disposal of the dollars or other hard currencies represented by securities for the practical reason that these are the "second line" of our own monetary reserves. We must be sure that these dollars—if I may quote a phrase which I used earlier—do not go astray. We do not insist upon the Treasury purchasing them compulsorily, but we want to be assured that they are not lost to our reserves.
§ Sir Arthur Salter (Oxford University)
Can the right hon. Gentleman say whether the investor is now perfectly free to sell any American securities so long as the proceeds are offered to the Exchange Control? I rather understood the opposite from his earlier statement.
§ Mr. Dalton
I was just going to try to explain that and kindred points. We no longer require compulsory purchase, but we wish to continue an authority to limit the disposal of the dollar and similar securities except with Treasury permission. Therefore, the position is that under the order which we shall make, a United States dollar security can be sold within the United Kingdom. The dollars must not disappear from the United Kingdom. Further, we must make sure that if a security is sold outside the United Kingdom, the dollars continue to be available to us.
On the subject of "switching," on which I was asked a question some time ago, about selling one and buying another, I shall be prepared to make a statement in the course of the Third Reading. There are certain discussions now proceeding I myself would like to see the power of "switching" established with reasonable freedom, but I am not yet in a position to make a statement 803 on the subject because there are discussions proceeding on an inter-governmental level, which will be concluded, perhaps, even before we reach the Report stage or the Third Reading. We may take the two on the same day, which is not uncommon in a case of a Bill which is not really contentious, such as this Bill, and I may be able to make a statement then. I would like to see the power of "switching" accepted, subject to reasonable safeguards, in the great majority of cases. We shall not be niggardly or pedantic in refusing permission for dealing with securities. In exceptional cases—cases of hardship, for instance—we shall not be unduly difficult in granting permission to dispose of dollar securities. We will undertake not to be stupidly difficult about it.
The third point on which I would like to say something is the question of persons "travelling to and from the United Kingdom. We are going to re-enact the substance of the present Travel Order. The new order will contain the £20 sterling limit, and there will also be limits on the import of a short list of other foreign currencies. In making that list, we are partly dependent upon agreements and discussions with the foreign governments concerned, but I would like to underline the fact—because here we come to the question of invisible exports to which importance is attached—that we are going to grant these orders, so as to make it as easy as possible for the foreigner coming to this country for a holiday, to spend his money with as little restriction and difficulty as possible. The American visiting this country will not be asked to hand over to us his dollar balances or his gold. In fact, so far as can be administratively contrived, we are going to leave visitors to this country as free as possible from exchange control interventions.
We must keep powers in the background, of course, but, as far as we can, we are going to make the visitor, during his visit to this country, unaware that we have exchange control at all, unless, of course, we have reason to think that he is deliberately engaging in evasive transactions of some kind or another—compensation deals, as they are commonly called—which, I am sure, all hon. Members would agree must be checked; otherwise, a very serious hole is rent in our defences. 804 Subject to that, and provided there is no reason to think that he is acting dishonestly and trying to enter into improper arrangements, we shall leave him as free as possible of any consciousness of exchange control.
On the subject of travellers' cheques, there was a long Debate, and I have sought to remind myself of the conditions under which travellers' cheques are issued. I have travelled abroad so little for so long a time that I still think in terms of old-fashioned letters of credit, but the difference is not, in fact, substantial. ' The non-resident coming to this country will be entitled to cash his travellers' cheques at banks, hotels, stores and any other reputable places where a traveller would naturally wish to cash them, but we must here be a little watchful that they are not sold to residents in this country who merely want to hold them as a reserve of foreign currency. We think that is neither right nor reasonable. All normal processes of cashing travellers' cheques at places where a normal person of good intent would wish to cash them will be free.
With regard to the resident, I have in mind the sad case of the friend of the hon. and learned Gentleman the Member for the Combined English Universities (Mr. H. Strauss), who wanted to leave the country by air but who was unable to do so for some days. The resident in this country can only obtain travellers' cheques from an authorised dealer or from some approved agency such as Cook's. That can easily be arranged and will cause no inconvenience at all. Travellers' cheques must not be issued by unauthorised persons, but there must be full facilities for the normal traveller or resident who wishes to travel to obtain his cheques from authorised agencies. He should use these for the purposes described in his application. I am advised that travellers' cheques are payable in this country always, and in such other countries as may be set out on the face of the authority.
I myself think in terms of letters of credit, and I recall that when I used to take out a letter of credit it was made out to such and such a foreign country. When I wanted to go to Yugoslavia, that country was added to a short standard list which otherwise would not have included Yugoslavia. The limitations imposed upon this 805 particular instrument are set out upon its face, with the places where it shall be payable, and, therefore, there will be no ambiguity. In any case, it will be possible—indeed, this is our intention under the order—to make travellers' cheques cashable in this country cover such circumstances as those indicated by the hon. and learned Member, where the traveller's intention is temporarily frustrated by the weather or some change of plans or the sickness of a relative, and he will be able to use the money here, even if he has not yet been able to use it where he would have much preferred to use it, abroad.
§ Mr. Dalton
The case put by the hon. and learned Gentleman was of a person who had to spend the night at an hotel, and had not got any small change. The hon. and learned Gentleman asked what could this person do? The answer is that he will be able to use his traveller's cheque to pay the hotel for his lodging and refreshment. We are looking again at Clause 4, which is relevant to this matter, because some other points have been mentioned in connection with it. We are going to see whether the words intended to enable "in Subsection (1), which is the subject of debate here, bring in instruments that we never intended to control. If so, we shall make an order under Clause 31 to exclude any such instrument by specific description. We are not anxious to take power to do anything which is not fully within the intention as we have set it out. That is a broad statement, and there remain a number of particular points raised in the course of Debate to which I promised to give attention.
§ Sir A. Salter
I would like to ask a question concerning travellers' cheques. A traveller frequently returns to this country with a certain number of travellers' cheques left over. He does not intend to use those travellers' cheques except in relation to the places permitted. It is very inconvenient if he has to cash them all at once and get fresh travellers' cheques later. I suggest it should only be an offence if he uses the travellers' cheques for an unpermitted purpose.
§ Mr. Dalton
I take it that the right hon. Gentleman's point is that it should not be an offence merely to hoard travellers' cheques for a while?
§ Sir A. Salter
It is a "hangover" from one visit. If one were to secure travellers' cheques for £5,000, obviously that would be improper, but if one had a "hangover" from one permitted voyage it would seem to me to be unreasonable to have to destroy them and get fresh cheques in a few months' time. This is a small technical point, of course.
§ Mr. Dalton
It is a small technical point. I would have thought if the amount involved was small, the de minimis rule would apply, and no one would want to bother with it. On the other hand, if it were large, he would, I think, naturally hand them in; he would not want to keep potential purchasing power like that idle. That at any rate, would be my own approach to it: if it were small it would not be worth bothering about, and if it were large he would hand them in to his bank.
May I now take a number of points which were raised by hon. Members in various parts of the Committee, and which I undertook to consider? We had some discussion about authorised dealers, how they were to be defined, and so on. Some hon. Members wanted protection for all existing people, and we saw some difficulties in that. I throw this out as a suggestion, not as a commitment, and I would like to see how the Committee would react to it. Possibly the simplest thing to do would be to accept, when the times comes, the Amendment to the Sixth Schedule standing in the name of the hon. Member for Chippenham (Mr. Eccles), in page 42 line 24, to leave out paragraph 5. If that were done it would mean that Treasury Orders containing the lists of authorised dealers would then have to be laid before Parliament from time to time. As I said earlier, we do not, as a rule, want to lay before Parliament mere lists of business names. That might perhaps sometimes seem to be invidious. At the same time, it would safeguard any existing authorised dealer from being struck off without due consideration—though I hope that point is really not at all substantial. I would hope that we could be trusted not to penalise in any way people who had been carrying out their functions quite properly. I see no danger to the Exchange Control in accepting that Amendment when the time comes, if that should seem to the Committee to be a reasonable way of handling the problem.
807 I am not hidebound about this. Generally speaking, of course, the authorised dealers will be the banks; at any rate, in a very high proportion of cases they will be the banks, and also the principal acceptance houses who are already, in many cases, authorised dealers. With regard to brokers and solicitors, generally speaking we have no wish to exclude people who are doing this now. But one has to keep a watch on the thing, to prevent undue multiplication of authorised dealers, which might make the administration rather difficult. However, I am open to suggestion as we proceed in the discussion. I offer the suggestion that acceptance of the Amendment to which I have just referred might afford an easy way out. So much for that.
The hon. Member for Chippenham also made reference to facilities for the entrepôt trade and merchanting. On the one hand, of course, we are anxious to do nothing to interfere with such continuance and development of the entrepôt trade as is really beneficial to this country. On the other hand, I do not think we can afford to finance the entrepôt trade quite indiscriminately. For example, if there is merely a small merchanting profit, which is paid in soft currency, we cannot afford to buy goods for dollars that would be passed on to a third country, merely with a small additional profit. The whole purpose of this matter is to safeguard our resources for more valuable currencies. There are some types of transactions which, though they may bring profit to an individual trader of this country, do not serve the wider national purpose which we have in mind. Therefore, there must be some discretion in the matter.
I hope that all hon. Members who have taken an interest in this will find encouragement in some figures which I shall quote to show the extent to which we are already financing, under the Exchange Control, sterling transactions involving goods moving from one foreign country to another; it is entrepôt trade in the sense that the goods do not touch here. For the month of October, 1946, the Bank of England approved no fewer than 7,000 applications, totalling £23,000,000 worth of trade of this kind; that is to say, 808 sterling transactions involving the movement of goods from one foreign country to another. I think that is a fair total, which shows that this trade is proceeding on a very substantial scale, and that there is no danger of its being unduly choked down by existing regulations. At the same time, we must reserve some right to see that those particular transactions are not, on balance, unfavourable to this country.
I was also asked about this matter by the hon. and gallant Member for Penrith and Cockermouth (Lieut.-Colonel Dower), who thought long delays would occur if all these cases were dealt with, as we say, on their merits. That is not, in fact, our experience. We find we can maintain a very fast service with all normal transactions. On most commercial matters, which are those referred for permission, we find that 24 hours is the normal period of time. If longer time than that is taken it is because there is something exceptional in the case. If it were demanded that the longer period should be brusquely shortened, it would mean we would have to give a snap answer in the negative, in cases in which we do not at present, without inquiry.
I was also asked about American investments in this country and how we would deal with such applications. I think, broadly, the answer is that we would welcome the direct investment of American funds in this country if the American investor is bringing a real contribution of "know-how", a real contribution of industrial knowledge which otherwise we would be without. But our factory space and our building labour force are very limited; and we have lots of things to build and do for ourselves. Therefore, I do not think an American should expect to be pushed ahead unless he is bringing some especially valuable "know-how" which will be of industrial value to our domestic productivity and export trade; he cannot expect to go anywhere near the head of our domestic queue. After all, there is a long list of people waiting for factory facilities and so on. Subject to that, we would welcome anything which added to our industrial knowledge. I am anxious, on the one hand, not to miss points that have been raised, but on the other hand I do not want to go on at tedious length. The question of brokers and solicitors was 809 raised, and I did mention that in passing and try to say something about it. We are considering it, and I will say something further on that on Report.
§ Mr. Dalton
Authorised depositaries. We have now a List A, as we call it, which includes 74 names. That is a very substantial number. It includes a number of acceptance houses and other people. Our feeling about brokers is that as temporary recipients up to, say, 30 days, there is no possible objection to the broker as what may be called a temporary authorised depositary; that is, in fulfilment of their normal function as dealers. But in general I do not think brokers regard themselves as permanent safe-deposits. However, I would not wish to rule them out in any brusque way. Generally speaking, it will be found that most holders of securities required to be so deposited prefer their bank, or one of the acceptance houses. I merely make that cautionary observation. We will look at it and see how far we can make it possible for brokers to play a reasonable and proper part in these arrangements, although I think the part their customers would wish them to play will be smaller than some hon. Members have suggested. The same is true, I think, of solicitors. They are not quite in the same class, because solicitors do handle the documents of their clients in a different fashion from brokers sometimes. If the Committee will let me continue to look at this to see what we can do on the Report stage, I will try to meet any reasonable suggestion as to a fairly wide category of authorised depositaries.
§ Lieut-Commander Braithwaite
Would it be possible to raise the matter also when we come to Schedule 6, and discuss it on the Amendment to which the Chancellor has referred, to leave out paragraph 5?
§ Mr. Dalton
Of course, it could be discussed there. We have to strike a balance, on the one hand safeguarding people against being unfairly treated, and on the other, not putting too many names of people and firms into these orders. As to switching, to which I have already referred in another connection, we are in consultation about that, and I will say something on that on Report.
810 The hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre), who was here just now but, I think, has left the Committee, raised a question about historic notes, gold coins, numismatic rarities, and so on. As to gold coins, there is no import ban on those, and we would not make any difficulty about them I do not think there would be difficulty there. Historic notes are covered by the provisions of Clauses 21 and 22. They should be declared at the ports. I think it is only reasonable to ask that anything of high value, an ancient note of some currency or other, should be declared to the Customs, whether coming or going. They are rather unusual, rather rare articles of baggage; and I think no customs or emigration officer would be unreasonable about them. We will issue the necessary instructions, but, normally speaking, the Customs officers would not wish to interfere with any reasonable movement of such things. Of course, if we found a particular traveller leaving the country frequently and always seeming to be declaring an historic note we should tend to regard him as a person to be regulated—a little bit more than if it were his first offence, or the first act of that kind.
The hon. Member for Edgbaston (Sir P. Bennett), who is not here now, raised an interesting point about the export of assurance policies. This is already allowed by general permit within the sterling area. There is no difficulty within the sterling area for the export of assurance policies, and we do not intend to make any. The companies concerned are also allowed to post policies to people abroad. Then the hon. Member for Northwich (Mr. J. Foster) asked for some explanation of various accounts tabulated in S.R. & O. 1383 of 1946. I have here an extremely long answer. I think the Committee will not deem it discourteous if I do not proceed to read it through, for it is very long and very technical. Possibly the hon. Gentleman will be so kind as to confer with me about it; and if he then finds any difficulty about the matter, and cares to raise it further, I will give a full reply to the Committee. I think it would delay the Committee too long if I were to read out this answer, because it is a complicated affair.
I think I have covered the principal points raised earlier on, and have given an accurate picture on broad lines of the way in which we intend to operate the 811 provisions. I want to emphasise again that this is a question of "see how we go." We must test it out. I repeat, we have no intention suddenly to sharpen up these controls. We have no intention to add difficulties. On the contrary, we are seeking to remove a certain number of difficulties and obscurities which have characterised these orders. I do think that within the framework I have been sketching we can give to all people on their lawful and proper occasions reasonable elasticity with regard to their doings, and reasonable freedom with regard to buying and selling, and so forth. I do hope it may be found in practice that these orders, which can be issued when the Bill is law, subject to the usual checks by the House, are not other than reasonable in themselves. I would also hope—which is a more important point—that the actual operation and administration of the orders by the officers concerned will also be felt to be reasonable, subject to the great need to safeguard our foreign exchange reserves in these difficult times. Subject to that, I hope it will be felt that these orders are administered with common-sense, and in a spirit to which no patriotic person can take objection.
§ Mr. Eccles
I think the Committee has good reason to thank the Chancellor for his very interesting statement, which has done much TO clear many points which have been put during our Debate. It is not possible, without examining the statement in detail, to make a full reply; but I am impressed by the number of relaxations which the Treasury intend to make, and I am impressed by the Chancellor's words, towards the end of his speech, that he would have to see how things went along, for they seem to reinforce our contention that the Bill should not be permanent. But we shall have an opportunity or referring to those words later.
There are one or two particular questions I should like to raise. The Chancellor described the relaxations in favour of non-residents. I am not quite sure whether everything which is now permitted to a non-resident is to be permitted under the new orders. I believe I heard him say that only a resident in the scheduled territories could take out of this country capital moneys repaid. I believe that at the present time a resident outside the scheduled territories can take out of 812 this country capital that was repaid—if, for instance, War Loan were paid off—and I should like to ask the Chancellor whether that right will be preserved under the new orders.
§ Mr. Dalton
May I answer that immediately? The answer is, "Yes." If I gave any suggestion that we were going to narrow that, I was failing to make myself clear. There is no intention to narrow rights on that point.
§ Mr. Eccles
I am sorry that travellers' limits are not to be increased. We feel that they do bear hardly on a certain class of traveller making long journeys, and I hope we shall have an opportunity to raise that later.
§ Mr. Dalton
Would it be convenient, if I answer the points as they come along? I do not want to intervene unduly, but it may be convenient for me to do so. A business traveller has greater facilities now, according to the nature of his business and the length of time. Apart from those facilities the ordinary traveller's facilities are limited to £75 a year; but the traveller on business has an extension now, and that will continue.
§ Mr. Eccles
I understand foreigners can bring into the country as many pound notes as they like. If that is so, it means a foreigner can buy our notes at a discount.
§ Mr. Eccles
I understood the Chancellor to say that non-residents could come here with as many notes as they wished.
§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)
With Swedish notes, for instance.
§ Mr. Eccles
I was glad to hear what the right hon. Gentleman said about the entrepôt trade. The particular point I had in mind previously in the Debate was that sufficient quantities of soft currencies—I was thinking, particularly, of the European currencies—should be made available to merchants to buy, in order 813 afterwards to sell, in dollars. As a matter of fact, it is not always wise to prohibit a man from buying in dollars. I know of one Bond Street dealer who spent 10,000 dollars at an auction of English furniture in New York, shipped the stuff back to his gallery in Bond Street, and sold it at double the price to American tourists the next season, so it is not always wise to prevent our dealers buying in America. We also welcomed the Chancellor's statement on American investments in this country, and agree with him that, of course, what we want is the "know how." We do not want Americans coming here ahead of our own requirements unless they bring something with them which is very valuable.
My last point is that the relaxations in regard to Empire securities are so sweeping and so obviously important that I cannot understand why they should not be in the Bill. It would have made a much better showing in our relations with the South Africans, for instance, if the general licences which are to be given, and which one knows will not be withdrawn without some very great crisis arising—which, we hope, never will—had been embodied in the text of the Bill. I thank the right hon. Gentleman for his statement, which I shall read tomorrow with the greatest attention.
§ Mr. Boothby (Aberdeen and Kincardine, Eastern)
I want to echo what the hon. Member for Chippenham (Mr. Eccles) has said and to thank the Chancellor for his clear and lucid statement which was, I am sure, reassuring to a very large number of us on this side of the House. The Chancellor laid great emphasis upon the fact that he hoped that these orders would be administered with what he called reason and commonsense, and I hope that that view will be conveyed not only to this Committee but to the officers concerned. I would like to lay a little emphasis on speed as well. I know that we do not want snap decisions, but in commercial and trade dealings the Chancellor will readily recognise the necessity for quick decisions. I hope he will emphasise to the officials and officers concerned the desirability of getting the permission or refusal to the traders concerned as quickly as possible. I also want to thank the Chancellor for what he said about the scheduled areas, or, as I prefer 814 to call it, the sterling area. He almost encouraged me in the course of his remarks to believe that it was not quite as dead as I thought it was. I have always been sure it would revive in the near future; and he gave me a little encouragement, by the freedom of action which is to be allowed within the sterling area, to believe that is less dead than I had thought, and that its revival will be even more lusty, vigorous and speedy than I had expected.
The Chancellor also referred to expenditure by non-residents in this country. Clearly he intends to give them a very large number of facilities, but as he was speaking I could not help wondering on what, for the time being, they would spend their money, I think he will have to look into that matter as well. The ordinary foreign visitor coming into this country at present has, on the whole, some pretty bleak experiences; and I would take this opportunity of reminding the right hon. Gentleman that he must give them some moderate comforts, a little bit to eat and even, although I hardly dare venture to say so, an occasional something to drink I do not think that it is much use the right hon. Gentleman giving large facilities to foreigners to spend money here unless he provides something for them to spend it on. I do not much mind how high the prices are; but if we have not got anything to give them, we cannot make a profit, and if we are not very careful we may disgust them, so that it will be a very long time before they come back. I beg the right hon. Gentleman to bear in mind that it is no use encouraging the tourist traffic unless we have something really good to offer. Otherwise, it may only discourage people and put them off, delaying the building up of a sound tourist traffic later on. The facilities in this country are not, at the present time, such as would encourage foreigners to come here, even if they had plenty of money; they might well discourage them from coming again in the future.
I am disappointed that the right hon. Gentleman has not seen fit to allow people, who are pretty jaded after six years of war, and who have not been abroad to see the sun and have a holiday for a long time, to have a little more than £75. I should have liked the right hon. Gentleman to raise the sum to £100, which I do not think would be unreasonable; and in this connection there is one other 815 point I want to put forward for his consideration. A number of citizens of this country earn money abroad, and it is very good for this country that they do so. They make it in America and they make it in Europe. Let us take, for example, the case of an author who sells a book in Switzerland. If it is a very good book which makes money, surely he should be entitled to spend a little of the money he has earned himself in Switzerland on a well-earned holiday, over and above the £75. Under the present regulations he cannot spend one penny of the money outside this country. If he wants to send his child to be educated there, he cannot even use money which he has himself earned in Switzerland for the purpose of paying the school bill. It is the same in the United States of America; an author—and we do produce some very successful authors—may make a very large sum of money in America, but he cannot go to California for six weeks to recover from the result of his efforts, with any degree of facility, comfort or sense of security. I think the right hon. Gentleman might look into the matter from that angle. People in this country who actually earn foreign currency might be allowed to spend, at any rate, a small quota in the country concerned if they wish to do so, over and above the £75. I put that point for the right hon. Gentleman's consideration; and, having done so, wish to say that I thought his speech was most reassuring and encouraging, and has given great relief to many of us on this side of the House.
§ Mr. H. Strauss
The Chancellor's speech was most useful in enlightening us on many points about which there was some doubt. I only wish to raise two; there was a third, dealing with foreign travel, on which his remarks were profoundly unsatisfactory, but as that is the subject of a later Amendment I will say nothing about it now. The two points I wish to put to the Chancellor are these. He and his advisers have obviously taken considerable trouble to ease the position of the non-resident so far as payments are concerned. I would suggest to him that he might consider whether it would not also be possible to ease the position of non-residents in regard to certain other prohibitions in the Bill. An obvious one arises under Clause 29 in the case of the exercise of the 816 power of appointment which was mentioned earlier. Throughout the Bill there are many cases in which the Chancellor of the Exchequer obviously did not have the non-residents in mind at all, and he might be able to ease their position considerably.
The only other point I would mention is one in regard to which the Chancellor's mind is already travelling in the right direction In fact, I believe that he agrees with what I am going to say. I want to express the hope that he will find it possible to authorise switching. Perhaps I might give a personal experience to show him the reason why I think it would pay him. I did not own many American securities, but I owned some, and most of them were very properly taken over by the Treasury—as I hope they always would be taken over in times of national need—to help to satisfy the national needs during the war. One was not so taken over, probably because it was, comparatively speaking, a dud. Anyhow, it was not taken over. I think the present position is that, if I sold it, the dollars would have to be handed over, and I should have lost my last foreign investment So long as that is the case, I shall not sell it until the Treasury tell me they want it.
He is now giving up the power to demand that such an investment should be handed over, and the position is, therefore, until switching is allowed, that the investment will remain in its present form. If, on the other hand, I were able to sell it and reinvest, I should probably reinvest it more intelligently, and in due course, if there again were a national need, the Treasury would be able to take over whatever investment I had made. It is clearly in the interests of the Treasury that I should be able to do this, which is an argument in favour of allowing switching. I believe that it is already in the Chancellor's mind, and I urge him, by that example, to see that it would pay him.
§ Squadron-Leader Donner (Basingstoke)
I wish to put one point in connection with the Chancellor's refusal to increase the £75 allowance to £100. Having recently returned from the United States, I know how difficult is this restriction, and how heavily it bears upon travellers. Could the Chancellor say what would be the cost to us, if the figure 817 was increased to £100? If he cannot give an answer today, perhaps he will be willing to make the information available at a later stage, and to consider the whole question in the light of the cost which would fall upon us by such an increase.
§ Mr. Dalton
I can answer the hon. and gallant Member now. It would be very difficult to give an answer that would really mean anything, because there are some people who think that a holiday is not worth while on £75, whereas if the figure was increased to £100, they might think it worth while. I know the statistics well enough to be able to say that no answer which I could give would really have a satisfactory meaning; it would be the wildest of guesses, and would not be an estimate at all.
§ Squadron-Leader Donner
Surely the right hon. Gentleman knows the number of people who have left these Islands during the last year and have spent £75? The right hon. Gentleman should be able to say, therefore, what it would have cost this country if these people had spent £100, and that would give us an approximate figure upon which to form a judgment.
§ Mr. Dalton
It would not necessarily give the answer, because there may be others who have not gone abroad, who might say that they cannot do it on £75, but who would go abroad if the figure were increased to £100. However that may be, I do not feel we can at this moment ease up, because in the last resort, this is a substitution for essential imports. Dollar resources have to be used in various directions, and I think it would be a little more important to get a little more fruit, rather than a little more travel for those who go abroad.
§ Squadron-Leader Donner
I appreciate that, but surely it would be possible to differentiate between hard currencies and soft currencies. There is no quarrel between us regarding the shortage of dollars. Would it not be possible to make a differentiation?
§ 6.15 p.m.
§ Mr. Assheton
We on this side of the House were very glad to hear some of the answers which the Chancellor of the Exchequer was able to give. I do not want to detain the Committee, but I want to be satisfied that there will be adequate publication with regard to the permissions about which the Chancellor told us at the beginning of his speech. I remember so well, in the days when I was at the Treasury, having complaints that the Board of Inland Revenue often made an administrative decision which other taxpayers in different parts of the country were unaware of. It was not the fault of the Inland Revenue, but it was a legitimate grievance. The same thing might happen here, if the public are not aware in one case of what has been done in another. I hope that the Chancellor will go out of his way to help the public, and that he will not wait for questions to be asked. I know it can be done by good administrators, and he is fortunate in having many. On the question of switching, I hope very much that when we come to the Third Reading, the Chancellor will have something satisfactory to tell us. I gathered from what he said that it was in his mind to make a concession, and I think that we shall feel very disappointed if in fact a reasonable concession is not made in that respect. My hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss) has given an excellent illustration for allowing some greater freedom in that particular matter.
I want to ask the right hon. Gentleman one question about authorised dealers, to which I hope he will give some consideration before we come to the Schedule. There are certain firms who before the war were definitely members of the foreign exchange market, who when the wartime regulations came in, were excluded from being dealers. I do not know whether the Chancellor has been made aware of this. They are not necessarily members of the Bankers Association or of the Acceptance House Association, although they were legitimate dealers in foreign exchange. I am not talking about brokers who might have dealt in foreign exchange, but firms who were definitely members of the foreign exchange market, and were recognised as such before the war. They have been excluded from dealing during the war, and 819 they loyally accepted the unilateral decision imposed on them. They now feel that the matter wants looking at again, and I should be obliged if the Chancellor would do so, and give some answer which will encourage my constituents in the City of London who have asked me to raise this particular point. On the question of the £75, as I understand it, the £75 relates to the visit, within one year, of an individual citizen irrespective of length. I wonder whether that is a wise and reasonable arrangement and also whether the point raised by my hon. and gallant Friend the Member for Basingstoke (Squadron-Leader Donner), as to the particular currency involved, might not be taken into account. For example, would the Chancellor not rather let someone, travelling in France, spend £100, than someone in America spend £75? It occurs to me that with greater flexibility in the amount, we might easily direct travel into certain channels, which would be less burdensome to the Chancellor and to the Treasury.
§ Question put, and agreed to.
§ Clause ordered to stand part of the Bill.