HC Deb 08 March 1956 vol 549 cc2308-9
50. Mr. Gordon Walker

asked the Chancellor of the Exchequer to make a statement on the effect as regards the United Kingdom and the sterling area of the decision by the Government of South Africa to impose restrictions upon the transfer of funds to the United Kingdom and other parts of the sterling area.

The Economic Secretary to the Treasury (Sir Edward Boyle)

The new control arrangements adopted by the Government of South Africa are not expected to have any significant financial or economic consequences to the United Kingdom or the sterling area or significantly to affect the central reserves. The South African authorities have made it clear that they intend to administer them in a sympathetic spirit and that the repatriation of British capital invested in South Africa will in no way be affected. The intention is no more than to enable the South African authorities to maintain the internal credit conditions they consider appropriate to the present state of the Union's economy.

Mr. Gordon Walker

Is not the Economic Secretary altogether too complacent? Is he not really saying that restriction on the movement of funds in the sterling area makes no difference at all? Is he not saying that because he realises that one of the bad effects of the Government's reliance on the Bank Rate is that it disrupts the unity of the sterling area?

Sir E. Boyle

The right hon. Gentleman might remember that similar powers are already possessed by India, Pakistan. Ceylon, Australia and New Zealand, and though we naturally a little regret any extension of controls, South Africa's move does no more than bring her into line with other independent sterling countries.