§ 7. Mr. Patrick Jenkin
asked the Chancellor of the Exchequer whether he will introduce legislation, with a provision requiring annual renewal, to give effect to the arrangements at present in force under the Exchange Control Act 1947, providing that 25 per cent. of the proceeds of sales of foreign currency securities must be exchanged for sterling at the official exchange rate.
§ Mr. Jenkin
Does the right hon. Gentleman not recognise that, with the premium now standing at over 25 per cent., the tax is about 5 per cent. on every change of a portfolio investment? Does he not think that a tax of this sort should be levied under an Act of Parliament, passed on that behalf, and not under some Regulations under an Act framed for an entirely different purpose?
§ Mr. Callaghan
No, Sir. This is not a tax. It is a concession under which, at the present time, investors are able to use this market to secure 75 per cent. of the proceeds without surrendering them to the reserves at the normal rate. And that cannot, in any sense, be regarded as a tax.