§ 43. Mr. Beswickasked the Chancellor of the Exchequer what action he proposes to prevent the build-up of undesirable amounts of hot money, sent to this country by foreign speculators for the sole purpose of earning the present abnormal interest yield.
§ Mr. MaudlingI see no reason to think that there is any strong movement of short-term funds into this country solely to take advantage of interest rate differentials.
§ Mr. BeswickCan the Paymaster-General say on what evidence he bases that remark? Is it not clear that the longer we have this exceptionally high interest reward to the foreign owners of money transferred here, the bigger problem we shall have when the interest rate is eventually lowered?
§ Mr. MaudlingThe best expert advice that I can obtain is that the movement of money represents the flow-back into London of normal commercial deposits here. In any case, one of the reasons for raising the rate of interest is to attract deposits.