§ Mr. Arbuthnotasked the Chancellor of the Exchequer what is the policy of Her Majesty's Government in relation to the acquisition of foreign currency securities by United Kingdom residents.
§ Mr. P. ThorneycroftUnited Kingdom residents are free to acquire foreign currency securities already in the possession of other United Kingdom residents and Her Majesty's Government do not propose to alter that situation. Hitherto, however, they have also been able to acquire legally foreign currency securities from residents in other parts of the150W sterling area and this has led to transactions in such securities by residents of those parts of the sterling area where free markets exist.
While any additions to private holdings of foreign currency securities in the United Kingdom increase our current overseas income, the capital cost of these purchases falls immediately on the reserves and I am not willing to let this continue. I have therefore decided to control the acquisition of foreign currency securities by United Kingdom residents. Directions to this effect were laid before the House yesterday evening and came into force at midnight last night.