§ 23. Mr. van Straubenzee
asked the Chancellor of the Exchequer what have been the major effects on the United Kingdom economy arising from the lifting of exchange controls.
§ Mr. Lawson
The dismantling of exchange controls during 1979 has led to substantial capital outflows from the United Kingdom. These are estimated to have amounted to about £2 billion during the second half of 1979. More recent balance of payments figures suggest that these outflows continued in the first half of 1980, though it is not possible to make any precise estimates of their magnitude. So far, however, these outflows have been more than offset by non-resident inflows.
The net effect of the abolition of exchange controls on the exchange rate has probably been to cause the subsequent appreciation in the rate to be less than would otherwise have occurred. There may also have been a slight downward influence on the money supply and on short-term interest rates.