Mr. E. P. Smith:

asked the Chancellor of' the Exchequer whether he is aware that the free market value of the £ in the U.S.A. varies from $2.25 to $2.60; and if he will abandon the fictitious official rate of exchange of $4.03 and free the exchange market from Treasury control, thus allowing the £ to find its natural level.

No, Sir. As I explained on 8th July last to the hon. Member for Maidstone (Mr. Bossom), these rates refer to the price of sterling notes, and not to the price of sterling on bank accounts, in which the vast majority of accounts are settled. The price of sterling notes abroad is usually below the official rate, because, except for the £5 allowed to travellers, these notes may not legally leave or enter the United Kingdom.

Mr. Smith:

Does not the right hon. Gentleman realise that his days of playing economic charades are nearly over?

Is my right hon. Friend not aware that what is called a "natural level" ought to be a very unnatural level?

Does not the Chancellor consider that if he made arrangements whereby pound notes were drawn in and new notes issued he would save hundreds of millions of pounds?

That is a rather different question.