HC Deb 21 January 1969 vol 776 cc238-9
29 and 30. Mr. Maurice Macmillan

asked the Chancellor of the Exchequer (1) by what authority British investors overseas are not allowed to sell forward currency of the country in which their money is invested;

(2) by what authority British exporters are not allowed to sell forward currency of the importing country.

Mr. Harold Lever

There are no restrictions on sales by United Kingdom residents of currencies of the Scheduled Territories. United Kingdom residents other than authorised dealers require permission under the Exchange Control Act 1947, to sell foreign currencies, other than to authorised dealers whose operations are conducted in accordance with directions under the same Act. Permission is in fact normally given to traders and others who show evidence that foreign currency receipts are due to them within a reasonable period.

Mr. Macmillan

Does this enable either an investor in a foreign country or an exporter who is owed money on credit in a foreign country to hedge against inflation by selling that currency forward, according to his judgment?

Mr. Lever

Yes, within a reasonable period, which is normally taken to be six months, he can do so. If he gives evidence that he is expecting a receipt either by way of exports or disinvestment, he can cover himself by selling forward.

Mr. Patrick Jenkin

Does this not demonstrate the great weakness, from the point of view of the liberty of the subject, which is inherent in the whole of our exchange control regulations? Would the Financial Secretary undertake to look at this, with the possibility of introducing new legislation which would make all the regulations and controls explicit, rather than that they should operate negatively, by way of a dispensation from a blanket prohibition?

Mr. Lever

If the hon. Gentleman will carefully read what I have said he will see that it proves the opposite, namely, that within the necessary restrictions the greatest flexibility is maintained so as to ensure that there is reasonable protection available to an individual, to cover his currency position.

Mr. Barnett

Would there not be even greater limitation on the liberty of the individual if we did not have exchange controls, and allowed limitations of growth, and the subsequent growth of unemployment?

Mr. Lever

Yes.