§ 9. Mr. Kimballasked the Chancellor of the Exchequer what prior consultations he had with other countries in the sterling area and the Commonwealth before instructing the Bank of England to issue the new exchange control regulations on 7th April; and what subsequent communications on this subject he has received from them.
§ Mr. CallaghanIn accordance with normal practice the other countries in the sterling area and the Commonwealth were informed immediately the changes which I announced in the Budget were made in United Kingdom exchange control. It has never been the practice to consult them in advance.
I have had no communications from the Governments concerned. There has been correspondence between the Treasury and Bank of England and some of the exchange control authorities concerned in regard to details of the arrangements.
§ Mr. KimballIs the Chancellor of the Exchequer aware that these ill-conceived regulations may well force Bermuda and the Bahamas to leave the sterling area? Would he be prepared to give an estimate of the effect on our sterling balance if they left?
§ Mr. CallaghanIf any area was exempted this would enable United Kingdom residents to use nominees in that area for their investments and thus evade the new rules. As the rules are already beginning to add to the strength of our resources, I hope that the hon. Member will not press me to take any steps which would weaken them.
§ Mr. Biggs-DavisonWill the right hon. Gentleman consider associating other Commonwealth sterling area countries with the management of the sterling area? Should not they be more closely associated in these days?
§ Mr. CallaghanThere is frequent contact between the central banks in the other parts of the sterling area and the Bank of England, as there is between myself and the Commonwealth Finance Ministers at regular intervals.