HC Deb 15 April 1991 vol 189 cc75-6
Mr. Sainsbury

I beg to move amendment No. 17, in page 4, line 30, leave out from 'at' to end of line 33 and insert 'intervals determined from time to time by the Secretary of State with the consent of the Treasury and in accordance with principles so determined.' During the Standing Committee discussion of clause 6, it was proposed that the word "may" should be deleted and replaced with the word "shall." That was proposed as an amendment at several places in the Bill. In the debate the point was made that the Secretary of State has to determine principles for the conversion of foreign currency commitments into special drawing rights if he is to meet his other obligations under clauses 6 and 7. I agreed in Committee to consider the amendment further. The wording now proposed makes it clear that the Secretary of State is required to lay down principles for the conversion of foreign currency commitments into SDRs. He will do this whenever necessary and with Treasury agreement.

In Committee interest was expressed in the principles that the Secretary of State might be called upon to determine under subsection (5)(e). The principles usually relate to mechanical operations that may be subject to change over time and for which it is therefore difficult to make statutory provision. Perhaps I could give two examples. The first would be deciding the precise rate to be used for converting individual foreign currency into SDRs. The closing rate for the last day of the quarter, as shown in the Financial Times, is used. The second example would be how to convert currencies for which no SDR conversion rate is quoted in the Financial Times—say, Australian and Hong Kong dollars. The current practice is to convert them into United States dollars by taking the average of the buying and selling rates, as quoted in the Financial Times, and converting it into the United States dollar equivalent. Because of the need to deal with unusual situations, such as those involving Hong Kong and Australian dollars, it would be inappropriate that the precise conversion mechanisam should be spelled out in the statute. That would be unhelpfully inflexible. We have encountered this point on earlier amendments.

This is a minor technical change. I hope that the hon. Lady is listening when I say that we are grateful to the Opposition for drawing attention to this shortcoming in the text of the Bill. I have pleasure in presenting the amendment to the House.

Ms. Quin

We are grateful to the Minister for taking into account the points that we made in Committee and for his proposal to amend the Bill accordingly. Obviously, we shall not oppose the amendment. However, I should like to ask the Minister for some information. He referred to the principles that govern the conduct of the Secretary of State and the Treasury in dealing with the provisions of this part of the Bill. Will there be an opportunity for parliamentary scrutiny of the principles, especially if they change?

Mr. Sainsbury

The amendment with which we shall next deal concerns the reporting arrangements. This is the sort of issue that could well be covered in the annual reports if the principles applying to the same sort of currency conversion should change.

Amendment agreed to.

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