I move that the Bill be now read a Second Time. The purpose of this Bill is to continue the Exchange Control Act, 1954, for a further four years.
Before the war, when sterling was freely convertible into any other currency, this country could at all times rely on using sterling so as to make payments or transfer money to any country. The restrictions on sterling transferability which have been in operation in varying degrees since 1939 suspended this facility and made it necessary to husband our receipts of dollars and other non-sterling exchange and to control our sterling payments to all non-sterling countries.
The emergency legislation which gave power to operate this exchange control was replaced in 1954 by the Exchange Control Act. As it was hoped that the need for exchange control would pass, the Act was expressed to terminate on 31st December, 1958.
In general the Act provides for the control of
(a) payments to and payments on behalf of persons resident outside the sterling area,
(b) dealings in gold and foreign exchange,
(c) dealings in and the export and import of foreign currency securities and unregistered securities,
(d) dealings in sterling area securities on behalf of persons resident outside the area and
(e) the export and import of currency notes.
The Act also provides that goods exported to a country outside the sterling area must be paid for in appropriate foreign exchange within six months. It empowers the Minister to specify the foreign currencies which must be sold to a bank. Finally it continues the powers given in the earlier emergency legislation to require the deposit of foreign currency securities and unregistered sterling securities. While it has not been necessary to bring these latter powers into operation since 1954 it is desirable that they should be retained lest the need for them should again arise.
General exemptions and permissions are given by way of Ministerial Regulations under the Act. In addition special permissions are granted in individual cases. Already in 1954 the control had been considerably relaxed and since then the scope of the exemptions and permissions has been further extended. At the present time, while capital transfers are allowed only in special circumstances, all classes of payments of a non-capital nature are authorised in full with one exception. The exception is expenditure on holiday travel outside the sterling area where there is a limit—though a generous one—of £100 per adult per annum over and above the cost of travel tickets.
In recent months, the outlook for sterling convertibility on current account has been favourable, but, unfortunately, there are no grounds for hoping that convertibility on the capital side is in sight. Indeed circumstances might arise which would cause a setback in the progress which has been made. As Deputies are aware, virtually every country in the world outside the dollar area has still to operate a system of exchange control. For these reasons, it is necessary that the Act should be continued. The Bill proposes a further period of four years, but I can assure the Dáil that if circumstances permit at any earlier time, steps will be taken to have exchange control abolished without delay.
