§ 2.42 p.m.
§ LORD BARNBYMy Lords, I beg to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask His Majesty's Government whether, in view of the reports now reaching this country of transactions in "free" (and so under pegged rate) sterling in raw materials of sterling origin culminating in their importation into, and payment by purchasers of, the United States, they can now foreshadow that steps to prevent this, such as the Bank of England would be expected to continue to take in such circumstances, will be any less unsuccessful than they appear to have been prior to recent devaluation.]
LORD PAKENHAMMy Lords, the precautionary measures which were taken before devaluation, and which were of value, are being continued, and the possibility of adding to them is not ruled out. Devaluation has, of course, taken much of the profit out of cheap sterling transactions.
§ LORD BARNBYArising out of that reply, which foreshadows the anxiety of His Majesty's Government that the circumstances which existed before may be repeated at a lower level, may I ask whether they will bear in mind that in the event of that expectation maturing from these operations in free sterling, resulting in large movements of commodities from the sterling area, the damage done to British trading interests by their being surplanted by Continental trading interests would be again repeated? Would the noble Lord take counsel with his colleagues in the Treasury to see whether provision cannot be made against that damaging prospect for British traders?
LORD PAKENHAMWithout being so pessimistic as the noble Lord, I can assure him that everything he has said is being borne in mind.