12th June 1979. Not Much to Take Abroad!
Restrictions in Britain on the import and export of currency have a long history back to 1299, but in modern times Exchange Control was vital, as in the 1930.s, at a time of depression and economic stringency, to conserve and increase gold and foreign currency.(1)
However as a trading nation with an Empire and vast capital assets abroad this had to be balanced against our earning power abroad for many industries, merchants, bankers and other commercial interests.
In World-War II the legal basis for Exchange Control was the Defence (Finance) Regulations under the Emergency Powers (Defence) Act 1939, to be superseded in October 1947.
It was the TORY BUDGET of Today in 1979 which aimed to dismantle all Exchange Controls, largely set up, post-war in 1947, when a largely bankrupt Britain was in the throes of desperate financial trouble: by October 24th all had been swept away.
In November 1945, admittedly when few could afford it, the personal foreign travel allowance was £100 per annum for each adult with £50 for a child; between October 1947 and May 1948 it was abolished completely.(2)
Emigrants from the UK after 1945, many to Australia, were allowed to transfer £5,000 per family in annual instalments over 4 years-a lot of money then-though any remaining assets were controlled.
When Labour left office in 1951 travel allowance was £100, reduced to £50 by the Tories and then by 1952 with a dire Balance of Payments situation it was £25. Raised to £40 next year, before finally returning to £100 1st Nov 1954.
Up until 1959 when restrictions were removed, Passports had a page listing the currency amount being taken out of the country.
Then in July 1966 under Labour’s Harold Wilson restrictions were reimposed, with the basic travel allowance of £50 (c£700 today), reintroduced to places outside the Sterling Area.
However tourism especially to Spain, backed by Travellers’ Cheques (as the Author remembers going to Sitges), flourished, from 700,000 (1964) to 1.2 million (1968).
However it was eventually realised that foreign investors saw no point in putting money in Britain if it was impossible to get the profits out, thus the reforms of 1979.
The effect was to free-up trade leading to the globalization of the next decade.
(1) Exchange Control is a limitation on how many pounds you could exchange for say Spanish Pesetas etc (before the Euro). It was necessary to keep the pound strong against other currencies.
(2) The American Marshall Aid Plan to 14 war-ravaged European countries included Britain via the European Economic Co-operation of April 1948, becoming the European Payments Union (EPU) 1st July 1950. By 1958 it was the European Monetary Agreement ((EMA).
In March 1954 the Gold Markets were re-opened after being closed in 1939.
Ref: dailytelegraph.co.uk/Allister Heath 20.2.2015.
Ref: bankofengland.co.uk/archives/documents.UK. Control Exchange Short History.
Ref: Hansard V 786.CC 48-97. MP.s demand abolition of £50 restrictions. 30.6.1969,
Ref: dailytelegraph.co.uk/Memories of Doom Currency Limits. Richard Alleyne.16.6.2007.