§ 2.36 p.m.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, I beg to ask the second Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they will consider the issue of gold £5 pieces into the United Kingdom currency, in view of our improved gold position and the prestige to the Nation which would accrue from such a policy.]
§ THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE)My Lords, as a matter of sentiment and prestige the noble Viscount's suggestion may have attractions. But I am afraid that the issue of a new £5 gold piece would put too great a burden on our gold reserves, in spite of their increase in the past year. I am not in any case sure that gold coins of the denomination suggested would be more generally convenient than bank notes.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, I thank the noble Earl for his reply, but may I ask him one or two supplementary questions? If, for instance, gold reserves are insufficient to issue £5 gold pieces in our currency, why is it, as is common knowledge, that last year we exported several million golden sovereigns? I would further ask the noble Earl whether Her Majesty's Government can give some information as to how much our reserves would have to be before they could consider issuing £5 gold pieces into the currency.
§ THE EARL OF DUNDEEMy Lords, in reply to the first question, gold sovereigns are a valuable export as collectors' pieces, and in certain countries, such as Arabia, they are sometimes used as currency. It is a profitable matter to this country that we should coin and export them. But as the noble Viscount knows, our exchange 749 position makes it necessary to continue the Exchange Control Act, which prevents people from keeping gold, although golden sovereigns are still legal tender. With regard to the second question, I cannot say what figure our reserves would have to reach before it would become practicable even to put an end to the Exchange Control Act, much less to consider the question of having a £5 gold issue from the mint for ordinary domestic currency transactions.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, may I be clear in my own mind as to what the noble Earl meant when he said that the gold sovereign is still legal tender, as apparently it is in Arabia and other places? Is it not still illegal in this country to retain sovereigns in private possession?
§ THE EARL OF DUNDEEYes, my Lords; and I thought I said that in my answer. Nevertheless, they are legal tender. They are held by the Bank, and it is important that that position should be maintained in order that we should be in a position successfully to prosecute foreign forgers, who could make a large profit out of minting forged British sovereigns and selling them abroad if they were able to argue that they are not legal tender in this country.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, do the Government pay any commission to traders who obtain payment in gold for goods exported?
§ THE EARL OF DUNDEEMy Lords, I am not sure how that arises out of the Question.
§ VISCOUNT MASSEREENE AND FERRARDMy Lords, may I ask the noble Earl whether he considers, in the interests of national savings, that if we had gold "fivers", the people would probably hoard them, which would be a cheap way, without the Government paying any interest, of making the people save?
§ THE EARL OF DUNDEEMy Lords, if the noble Viscount will promise to hoard them all, and not to spend them, I will ask my right honourable friend to consider that point.