§ Mr. Biggs-Davisonasked the Chancellor of the Exchequer whether he will make a statement on the application of exchange control as a sanction against Rhodesia.
§ Mr. CallaghanI summarise below a number of exchange control measures which have been taken. They are making an effective contribution to the Government's policy designed to bring about an early return to constitutional government in Rhodesia.
Summary of Exchange Control measures
1. On 11th November Rhodesia was excluded from the Sterling Area. Since then all transactions between United Kingdom residents and residents of Rhodesia have been subject to Exchange Control. A number of changes have since been made in the policy for operating the Control, notably on 1st and 18th December, 1965. The following is a summary of the position on 25th January, 1966.
2. No transfers are allowed of capital from residents of the United Kingdom to residents of Rhodesia, whether in the form of direct investment, or of the purchase of Rhodesian securities, or by any other means. Residents of Rhodesia who own United Kingdom and other sterling securities may have the proceeds of any sale of any such securities credited only to a "Rhodesian security sterling account" which may only be used for appropriate re-investment subject to control or sold to another Rhodesian resident for such investment.
3. Practically all current payments from residents of the United Kingdom to residents of Rhodesia have been stopped. The main exceptions are
- (a) pensions (which are covered by a special arrangement, mentioned below);
- (b) travel for appproved business and official purposes;
- (c) gifts up to a total of £50 since I 1 th November;
- (d) certain payments allowed exceptionally on humanitarian grounds, including severe personal hardship, or for the continuation of the work of certain missions and charitable organisations.
In general, any payments allowed within these rules from the United Kingdom to Rhodesia must be made in sterling to Rhodesian sterling accounts. These accounts can be used only for limited purposes, mainly for payments of a personal nature to the United Kingdom and the Sterling Area. They cannot be used for purchases of services of a commercial character or goods.
9W4. A special arrangement has been made for pensions which allows payments of pensions from the United Kingdom to Rhodesia and from Rhodesia to the United Kingdom through a special account. Any balances in this account in favour of Rhodesia will be usable for approved purchases from the United Kingdom or the Sterling Area of goods and services other than arms or oil or petroleum products.
5. Imports into the United Kingdom from Rhodesia are controlled by import licensing, not by Exchange Control. Almost all have been stopped. If any exports from the United Kingdom to Rhodesia take place, no credit may be allowed: payment must be made on or before shipment, in a convertible currency other than sterling. Services of a commercial character purchased by residents of Rhodesia from the United Kingdom must also be paid for in a convertible currency other than sterling.
6. Merchanting through London is prohibited both of goods sold to Rhodesia and of Rhodesian goods sold elsewhere.