§ 36. Mr. Dodds-Parkerasked the Chancellor of the Exchequer by how much each year the £11,000 million of the 243 United Kingdom's overseas assets is being reduced by the capital levy of the 25 per cent. enforced investment premium.
§ Mr. CallaghanI assume that the Question refers to the Exchange Control rule under which the equivalent in specified currency of 25 per cent. of the proceeds of sale of a foreign currency security must be sold for sterling at the official rate of exchange. As I said in my Budget speech, this rule added over £70 million to the reserves last year.
§ Mr. Dodds-ParkerIs the Chancellor aware that in effect this is chiselling off that amount from the overseas investments of the country of which the Prime Minister made so much on his last visit but five to the United States?
§ Mr. CallaghanI disagree with that interpretation. What is being done is to ensure that investors who have the privilege of selling their overseas securities at the investment currency premium surrender 25 per cent. of it to the official reserves. That seems to be a very good thing in present circumstances, and I do not think that there is any widespread objection to it.
§ Mr. Maurice MacmillanIs not the Chancellor aware that over the five years ending 1964 the United Kingdom has been a net importer of long-term capital on private account from the non-sterling area and that it is the interest paid on the private importation of capital by the overseas sterling area which is depleting the reserves and not, as he seems to think, the long-term export of capital from this country?
§ Mr. CallaghanI saw the hon. Gentleman's letter in The Times and he is now trying to make the point again, but, alas, it has nothing to do with this Question.