HC Deb 26 January 1971 vol 810 cc306-7
14. Mr. Dixon

asked the Chancellor of the Exchequer whether he will review the working of Exchange Control Regulations in so far as they relate to what is commonly called the 25 per cent. surrender rule.

Mr. Patrick Jenkin

Like all exchange control rules, this rule is kept under review. But my right hon. Friend has to weigh against the disadvantages the inflow of foreign currency which it brings to our official reserves, running at about £100 million per year.

Mr. Dixon

Does not my hon. Friend agree that the present regulations, far from helping our balance of payments, inhibit British investors in trying to increase their income from overseas sources and to increase the capital value of their investment, and, therefore, in the long run, positively harm our balance of payments?

Mr. Jenkin

I recognise that point of view, but we do not hold it at present. We realise that the rule has an inhibiting effect on the management of overseas portfolios, but one must bear in mind the advantage to the reserves that it brings in the short and medium-term.