Capital outflows since the dismantling of exchange controls seem to have been running at about £ 1 billion a quarter, for the greater part representing repayment of foreign currency debt by United Kingdom companies. Overseas purchases of sterling assets over the same period have more than offset these outflows.
To use the Chancellor's words and to telescope a series of economic propositions into a single sentence, is it not none the less true that it would be more comfortable to make moves towards a less strong pound if there were a fallback of some sort of exchange control machinery? Given the reply to my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry), do we take it that the 1964 and 1977 machinery is adequate to bring back exchange controls should outside events unwelcome to the Government make that practicable and necessary?
It will be asked in good faith and answered in good faith. The residual law is kept in being on account of European Community obligations. I do not believe that it is to the advantage of the economy to try to proceed towards a situation in which either the inflow or outflow of capital is more restricted. I believe that we should move to a regime that seeks greater liberalisation.
Does my right hon. Friend accept that those of us who bear the responsibility of trying to create employment and who are doing so take great pleasure in the fact that we have been set free from the shackles of exchange controls and enabled to create employment?
I take account of my hon. Friend's remark. Although this is a fairly esoteric subject, it sharply divides in the starkest philosophic terms the differences between the two sides of the House.
Is the Minister aware that the motor car manufacturing industry is in great difficulties? Is he also aware that at the same time almost all foreign car manufacturers are advertising their cars for sale on 5 per cent. loans, a rate that is a third of the going rate in Britain? Will he examine the terms of this financing to ascertain the extent of the manoeuvring and manipulation of exchange controls that is enabling foreign firms to sell their cars in Britain at the expense of British manufacturers and to manoeuvre interest rates so that they can advertise loans costing only 5 per cent?