OPIN­ION

Rem­i­nisc­ing about the £50 over­seas spend­ing limit; and new tax break rules for pri­vate let­tings

Business Traveller - - CONTENTS - JEFF MILLS A TRAVEL RE­PORTER AND EDI­TOR FOR MORE THAN 30 YEARS BT

When I first started trav­el­ling for busi­ness in the 1960s and 70s, there was still a spend­ing limit for trips abroad. I re­mem­ber only too clearly the chore of mak­ing my way from my news­pa­per’s of­fices close to Fleet Street to a rather smart branch of Coutts bank on The Strand be­fore any busi­ness trip. Once there I would present my pass­port, which would then be marked on a spe­cial page stuck in at the back with the date and amount of for­eign cur­rency I had been is­sued with (£50, if me­mory serves).

In fact, it was not only the small amount of for­eign cur­rency that would be recorded but also the value of any trav­ellers’ cheques with which I had been is­sued, a method of car­ry­ing money abroad be­fore credit and charge cards took over the cor­po­rate travel world.

The over­seas spend­ing limit of £50, the equiv­a­lent of about £650 to­day, had been in­tro­duced by Prime Min­is­ter Harold Wil­son’s Labour gov­ern­ment in 1966 in an at­tempt to nar­row what had been a very large balance of pay­ments deficit and at the same time re­vive the fal­ter­ing econ­omy.

BEND­ING THE RULES

It failed even­tu­ally, not least be­cause for­eign com­pa­nies and high-net-worth in­di­vid­u­als could see lit­tle point in in­vest­ing in the UK if it be­came vir­tu­ally im­pos­si­ble to get any prof­its out of the coun­try again. The cur­rency con­trols were even­tu­ally abol­ished by Mar­garet Thatcher’s Con­ser­va­tive gov­ern­ment in 1979, but not be­fore plenty of in­ge­nious schemes had been hatched to get around the rules. One such scheme was dreamed up by singer Cilla Black and her hus­band, Bobby, who were find­ing it dif­fi­cult to ex­port the fi­nal £1,000 they needed to pay for a villa in Spain. Bobby, a for­mer baker, de­cided to hide the money in a hol­lowed-out loaf of bread. It’s said the maid at their Span­ish villa wit­nessed the cou­ple eat­ing toast with a hole in the mid­dle the next day.

CUR­RENCY LIM­ITS

For most peo­ple, though, you could for­get about buy­ing a prop­erty abroad, pur­chas­ing over­seas eq­ui­ties or fi­nanc­ing even a mod­est hol­i­day. The con­trols were, to all in­tents and pur­poses, lit­tle but a re­stric­tion on free­dom of move­ment and the abil­ity of Bri­tish sub­jects to leave the coun­try.

What the scheme did achieve, how­ever, was to en­cour­age the growth of the pack­age-tour busi­ness, not only for hol­i­day­mak­ers but to a lesser ex­tend for those trav­el­ling on busi­ness. You may not have been able to take more than £50 abroad with you but there was noth­ing to stop you pay­ing for as much as pos­si­ble in the UK be­fore you trav­elled.

If you used the ser­vices of a busi­ness travel agent or tour op­er­a­tor you could not only pay for your air fare, pretty much as you do to­day, but you could book and pay for your ho­tel and car rental in ster­ling be­fore you left home. I seem to re­mem­ber that in some cases ways could even be found for you to pay for full board, so you didn’t need to shell out for food while you were away. And there were other un­of­fi­cial ways to get round the rules.

If you or your com­pany had as­so­ci­ates over­seas, there were some­times ways to get them to pay your ho­tel bill and per­haps ad­vance some cash to use dur­ing your trip. This could then be re­paid in ster­ling if your as­so­ci­ates or cus­tomers came to the UK on busi­ness. I can cer­tainly re­mem­ber be­ing en­ter­tained fairly lav­ishly by col­leagues liv­ing and work­ing in places such as Brus­sels, Ham­burg, Hong Kong and Canada, who were only too happy to fund the odd night out dur­ing my vis­its to their home bases, know­ing full well that their hos­pi­tal­ity would be re­paid next time they found them­selves in Lon­don.

But no mat­ter how in­ven­tive busi­ness trav­ellers were, the £50 limit was at best an an­noy­ance, act­ing as it did as a brake on in­ter­na­tional busi­ness.

So there was much re­joic­ing when the Thatcher gov­ern­ment used the Bud­get in June 1979 to an­nounce its plans to abol­ish ex­change con­trols. The then Chan­cel­lor of the Ex­che­quer, Lord Howe, summed up the sit­u­a­tion well when he made it clear that there would be “full free­dom to buy, re­tain and use for­eign cur­rency for travel, gifts and loans to non-res­i­dents buy­ing prop­erty over­seas and in­vest­ment in all for­eign cur­rency se­cu­ri­ties”. For­eign cur­rency ac­counts could now be held in the UK or abroad, and pass­port mark­ing for travel funds was abol­ished.

It helped pave the way for an ex­plo­sion in busi­ness travel and tourism, not to men­tion trade. An ex­plo­sion we still en­joy to­day.

Abol­ish­ing ex­change con­trols paved the way for an ex­plo­sion in busi­ness travel, tourism and trade

Newspapers in English

Newspapers from International

© PressReader. All rights reserved.