§ 63. Mr. Leverasked the Chancellor of the Exchequer what is the amount of capital transferred by U.K. residents to South Africa and Eire, in the last 12 months; whether current trade balances between these countries and the U.K. are favourable or adversely; and whether he will order the registration of U.K. residents' assets in these countries and suspend further transfers of capital to them.
§ Mr. DaltonAbout £35 millions and £10 millions respectively in the 12 months ending 30th June, 1947. The current trade balance with both countries is favourable to the United Kingdom. The action suggested by my hon. Friend could not be taken against other members of the sterling area.
§ Mr. LeverIs my right hon. Friend satisfied that we should finance the favourable balances of these countries—in other words, provide them with more exports than we get imports in return—by allowing people to take their capital from this country? Will he take steps to prevent any addition to the amount of unrequited exports?
§ Mr. DaltonMy hon. Friend will appreciate that the sterling area may be defined as an area within which exchange control does not operate. That is what it means. So long as any country is within the sterling area, it follows from the conditions created that capital movements are free in both directions. On the other hand, my hon. Friend will also recall that the South African Government have lately been exceedingly helpful to us in many respects, and, when I speak of favourable trade balances, according to the way in which these figures are customarily rendered, movements of gold are not included. With regard to Eire, discussions are going on with the Eire Government in order to increase, to the mutual benefit, trade between us.
§ Mr. LeverBut is it not a fact that there are in force restrictions between different parts of the sterling area—restrictions on transfers of gold—for example, as between Australia and this country?
§ Mr. DaltonNo. My hon. Friend has got it wrong. Between any two members of the sterling area, there is, by the definition of the words, no control of 1537 capital. The exchange control operates between this country and the rest of the world outside the sterling area. This matter was abundantly explained in a long Debate in this House, and it was made clear that our exchange control operations do not operate, and were not intended to operate, within the sterling area itself.
§ Mr. LipsonDoes the Chancellor's answer mean that a person going from this country to South Africa may take whatever money or jewellery he or she likes?
§ Mr. DaltonJewellery is a Customs matter. It means exactly what I say. There is no control of capital movements between this country and South Africa in either direction.