Foreign Exchange (Estimated Saving)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 7th March 1967.

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Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton 12:00 am, 7th March 1967

asked the Chancellor of the Exchequer if he will give an analysis of the estimated saving of £100 million in foreign exchange forecast on 20th July, 1966, together with a comparative analysis of the savings to date.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I would refer my hon. Friend to the Answer I gave to the hon. Member for Belfast, North (Mr. Stratton Mills) on 22nd February. —[Vol. 741, c. 319–20.]

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Does that reply mean that there will be a saving of at least £100 million in 1968–69; that this will be the real net saving, and not be offset by increases elsewhere?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The figures that were published in the Defence White Paper, which I gave in my earlier reply, show that defence savings will build up to an annual rate of about £75 million by the end of 1967–68.

Photo of Mr Stratton Mills Mr Stratton Mills , Belfast North

Will the Chancellor of the Exchequer remind the House that the Answer to the Question to which he refers shows that the saving during 1967–68 would be only £70 million, some £30 million short of what the Prime Minister promised on 20th July?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

That is the figure I gave of the savings I could see at this moment building up during 1967–68.

Following is the Table:

the saving in foreign exchange in 1966–67 and 1967–68, respectively, from the restriction of foreign travel allowance for holidays to £50 per head and if he will give an assurance that when the restriction ends in November, 1967, he will revert to the practice previously in force.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

It is estimated that the exchange control measures taken in July, of which travel restrictions were one, will save about £50 million a year in foreign exchange. A decision about the next travel year will depend on the balance of payments prospects generally, and on experience of the present arrangements.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

I had understood that this restriction was to last only 12 months. Does this reply mean that it could last longer? Is not my right hon. Friend aware that this restriction is giving a totally false impression of Britain abroad, and would he perhaps reconsider the Answer he has given?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

No, Sir. I see no reason to reconsider the Answer I have given, which is that the decision for the next travel year will depend on how well we do on balance of payments generally.