HC Deb 15 June 1954 vol 528 cc1727-8
36. Mr. Gaitskell

asked the Chancellor of the Exchequer whether he will state the policy of Her Majesty's Government on the convertibility of the £ sterling.

Mr. R. A. Butler

The policy of Her Majesty's Government on the convertibility of sterling remains as stated in the Communiqué of the Commonwealth Economic Conference of 1952.

Mr. Gaitskell

Has not the Chancellor seen during the last few weeks that a number of rumours have been put about in the Press suggesting that Her Majesty's Government do contemplate some early further step in this direction? May we take it that the Government do not intend to take any further steps towards convertibility in the near future?

Mr. Butler

The convertibility of the £ sterling is a most desirable objective towards which it would be our wish to work as best we can, but the conditions remain as I stated them, namely: an improved and continuing success in the internal policies of the sterling area countries, which has been most marked in recent months; the prospect of other trading countries adopting policies in trade conducive to trade expansion, which is not going as fast as I would wish; and the provision of adequate support funds from the International Monetary Fund or otherwise, and that is a matter which is constantly under discussion. Those three conditions remain, and, as far as I can see, we are making very nice progress, but we shall remain throughout as sensible as the right hon. Gentleman would wish.

Mr. Gaitskell

May we take it that the second condition includes some further steps by the United States' Government to allow freer imports into America?

Mr. Butler

The situation is not confined solely to the introduction of freer imports. It is summed up in the general phrase "good creditor policies," and we would naturally wish to see good creditor policies adopted.

Viscount Hinchingbrooke

Will my right hon. Friend be prepared to entertain the idea that in advance of convertibility the travel allowance might be moderately increased?

Mr. Butler

It is true that the sterling area reserves have risen considerably in recent months, but I do not think that the situation is such that relaxations are any easier. When I can make relaxations I will naturally do so, but I do not wish to create an unduly optimistic view in this country or anywhere else.

Mr. Albu

Does the right hon. Gentleman not think it is dangerous to take any steps in this direction based on what many people think are temporary factors, and particularly those in the terms of trade, and is it not very misleading to allow what I suppose are rather inspired statements to appear in the Press encouraging people in other countries to think that we are going to do things that we do not intend to do?

Mr. Butler

Many of the statements in the Press are not inspired by me at all, including one which appeared on Sunday and which gave my views on convertibility which I was most interested to read. Furthermore, some statements made by many of my more distinguished friends abroad do not necessarily represent my views. I am a believer in moving towards the freeing of the £ sterling, and I shall do so when I think it is a safe and sure operation.