§ It is against this background that I have considered the question of exchange control. I do not need to dwell on the value of investment abroad as a means of maintaining our invisible earnings for the future. The purpose of the present exchange control arrangements is to limit the methods of financing available to investors, so as to minimise the cost to the reserves; but this has not prevented a substantial and welcome growth in overseas investment in recent years.
§ The Treasury will be announcing today certain comparatively minor changes in the exchange control arrangements affecting direct investment in the non-sterling area. They are changes which will facilitate useful investment without significant cost to the reserves. But I cannot at the present time authorise any extensive or general relaxation of exchange control in relation to overseas investment; and I am afraid that, in the present circumstances, I must ask companies and institutions to continue for the time being to observe the voluntary programme of restraint on direct and portfolio investment in the four developed countries of the sterling area. This is not a satisfactory arrangement, but its abolition could involve a large cost, and it would be imprudent to make such a change this year.