Sterling Link Effects on Foreign Pensions
Collins asked how breaking the sterling link or changing the Irish pound would affect foreign pensions and income. Colley said their Irish-currency value could fluctuate; he rejected O’Leary’s claim that revaluation was remote, explaining that both possibilities were included because the question asked about them.
asked the Minister for Finance the effects on persons receiving pensions and other income from England and other countries in the event of the sterling link being broken; and in the event of (1) a devaluation of the Irish £; and (2) a revaluation of the Irish £.
Comment on this
In the event of a decision to break the link with sterling the value of pensions and other income denominated in sterling could fluctuate in terms of Irish currency. This is the case at present for all non-sterling receipts. The extent of any movement between the Irish £ and sterling, and between the Irish £ and other currencies, would depend on the circumstances and, in particular, the exchange rate arrangements adopted by us in the event of a break with sterling.
In general, it can be said that a devaluation against sterling and other currencies would result in an increase, in terms of Irish currency, in income received in sterling and in the other foreign currencies concerned. A revaluation of the Irish £ against sterling or other currencies would result in a reduction, in Irish currency terms, in the relevant receipts.
Comment on this
Does the Minister seriously suggest to the House that the recent terms of trade give us the remotest possibility of revaluating against sterling?
Comment on this
It seems to me that the Deputy is ranging rather far from the question. The fact is, as the Deputy knows, that at present people in receipt of pensions, for instance, from the United States, find that the value of their pensions in Irish currency terms change upwards or downwards, depending on the exchange rate between the dollar and sterling.
Comment on this
The only aspect of the Minister's reply which interests me is that section referring to the possibility of revaluation of the Irish £ against sterling. I am making the comment that that is surely a very remote possibility considering the disastrous trend in the terms of trade recently.
Comment on this
I do not accept the Deputy's contention. The only reason I have mentioned it is that it was necessary, in view of the terms of the question, to consider both possibilities, revaluation and devaluation.