The post below was first published on our
Policy Matters blog
Since the US Dollar departed from the gold standard in 1971 much
of the world has abandoned or substantially relaxed capital and
exchange controls. International trade and investment has grown
dramatically since that time and it is acknowledged that open
markets stimulate trade. The UK has been since the 1980s at the
forefront of countries advocating open economies and international
trade and investment.
Until recently, it would have been laughable to envisage the UK
either needing or wanting to introduce capital and exchange
controls, but there have been persistent rumours that the Labour
Party would take this course, if it won the next General Election,
in order to counter a flight of capital from the UK, or the risk of
this occurring. The Shadow Chancellor, John McDonnell, in a speech
in January 2019 was emphatic that the Labour Party, if it came to
power, would not introduce capital controls and
