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Volume 530: debated on Tuesday 13 July 1954

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asked the Chancellor of the Exchequer what changes he proposes in the working of the European Payments Union as a prelude to convertibility.

I would refer the hon. Member to the answer I gave on 6th July to the right hon. Member for Leeds, South (Mr. Gaitskell). The changes which we have made are designed to meet the needs of the moment. The effect on the Union in the event of convertibility being decided upon by one or more countries, is now being considered by a Committee established by the Council of O.E.E.C., of which I am chairman; we are about to start work.

Does not the Treasury Bulletin point to certain difficulties which may arise if some currencies are made convertible while others are not strong enough to become convertible, and have the Government any proposals for altering E.P.U. to deal with the situation, or do they intend, as has been suggested, to do it in another year's time?

The latter part of the question would be a simplification. In regard to the former part, nothing could be more complicated than a situation in which some currencies would be convertible and some would be non-convertible. That is precisely why we are setting about an examination of this problem in the event of a possible future convertibility operation. We are simply doing it against such a possibility, and not with any specific plan in mind.


asked the Chancellor of the Exchequer which European countries have indicated to him that they are ready to make their currencies convertible.

Such decisions, which have not been imparted to me, must be left to the countries concerned.

Do I understand the Chancellor said in his reply that it is not intended to go forward with convertibility until practically all the countries concerned are ready to do so?

No, Sir; I could not say that, because this question of convertibility lies absolutely within the discretion of individual sovereign countries. I could give no undertaking, but I think it is more likely that there will be a collective approach to this subject than an individual one.