HC Deb 21 November 1967 vol 754 cc1112-5
10. Mrs. Renée Short

asked the Chancellor of the Exchequer what savings he estimates have been made as a result of the £50 tourist allowance during this holiday season.

18. Mr. Biffen

asked the Chancellor of the Exchequer what is the estimated saving in foreign exchange arising from the restricted overseas travel allowance; and what proposals he has for ending this restriction.

20. Sir G. Nabarro

asked the Chancellor of the Exchequer what saving in foreign exchange resulted from the £50 travel limit in the travel year 1966–67, and what savings he estimates for the travel year 1967–68.

Mr. Callaghan

As to 1967, I cannot at present add to the replies given to the hon. Member for Bournemouth, East and Christchurch (Mr. Cordle) on 24th October and the hon. Member for Louth (Sir C. Osborne) on 7th November. As to 1968, the effect of the exchange control restrictions is now likely to be greater than in 1967. Removal of the restrictions depends on the development of our balance of payments position.—[Vol. 751, c. 424; Vol. 753, c. 81.]

Mrs. Short

Can my right hon. Friend say if in the meantime he intends to increase the allowance to take up the difference because of the devaluation? Will he not consider the loophole left for the big fish to get through who export large amounts of capital to buy villas in Spain and invest in industry abroad? Does he not realise that we ought to go after these rather than after the tourists?

Mr. Callaghan

I have no proposal for increasing the travel allowance at this time for 1968. As regards property investment, my hon. Friend will be aware that there is no sanction or permission for anyone legally to export money from this country for the purpose of buying villas in Spain. There is only a property currency market, which has a revolving pool of currency which is, at the moment, outside the control of this country.

Mr. Biffen

If the consequences of devaluation are as substantial as the Prime Minister has asserted, is this not the occasion to end one of the restrictions whose effect is widely believed to be so capricious?

Mr. Callaghan

I do not like capriciousness in the administration of any of these regulations, and I doubt whether it is as capricious as the hon. Gentleman says. There is always room for people who will illegally try to evade regulations until they are found out but I do not think that this is the right moment, at a time when people will be asked, and are being asked, to forgo an increase in their standard of life, to allow foreign exchange, in additional amounts, to be spent on foreign travel.

Sir G. Nabarro

Does not the Chancellor realise that, post-devaluation, the travel allowance, for example in the countries of the E.E.C., is worth only £43 instead of £50 and, as this is a derisory sum to suggest that any reasonable person may take a 14-day holiday upon, would he not agree that we ought surely to have an adjustment to perhaps £60?

Mr. Callaghan

I recognise that the value of the allowance has been cut by last Saturday's announcement, but I cannot come forward at this moment with a proposal for increasing it.

Mr. Whitaker

Is my right hon. Friend aware that there is a very widespread feeling in the country that, while foreign exchange is in short supply, it is better that it should be shared among the greatest number of people, to enable them to have a modest holiday rather than that the hon. Member for Worcestershire, South (Sir G. Nabarro) should affect his health by over-eating pâté de foie gras?

12. Mr. Wingfield Digby

asked the Chancellor of the Exchequer on what grounds he is applying for a waiver from the International Monetary Fund articles for an extension of the £50 travel allowance.

30. Mr. Blaker

asked the Chancellor of the Exchequer what representations he has received from the International Monetary Fund calling for the removal of the £50 tourist travel allowance; and what reply he has sent.

Mr. Diamond

The Fund's continued consent to the £50 travel allowance was sought and obtained for balance of payments reasons. I have received no representations on the subject from the Fund.

Mr. Digby

Have the grounds for continuing to protect Article 8 of the I.M.F. altered since devaluation? Is this application to be an annual event? Are not the real reasons Socialist prejudice?

Mr. Diamond

No, Sir. The answer to the latter two parts of the tripartite supplementary question is "No." Under the Articles we are required to obtain the Fund's consent to restrictions, and that we did.

Mr. Blaker

With reference to the answer which the Chancellor of the Exchequer gave a few moments ago, can the Chief Secretary say what is the ground on which one can justify a situation in which people are able to buy a foreign car thus spending foreign currency but are not allowed to spend more than £50 on foreign travel? What is the sense in that?

Mr. Diamond

I think the hon. Gentleman is making the point that, in addition to foreign currency, there is the very important element of balance of payments considerations. That is absolutely right.

Mr. Rankin

Why should members of the Opposition continue to try to kid us that £50 is all they get?

Mr. Higgins

Will the right hon. Gentleman now answer the first supplementary question? Why is it that the Government are still justifying this action on balance of payments considerations? Are we to understand that we are still in balance of payments difficulties and that the Government expect these difficulties even after devaluation?

Mr. Diamond

This application was made in advance and, as I have already said, it is still making a useful contribution, to the solution of our balance of payments problem.