Hi David,
It's a Voltage Regulator. Per the wiring diagram for series 2 this wire from 7 goes to this regulator first and then to the gauges on the dash. It lowers the voltage for the gauges. For my car it was two wires connected with one female disconnector (plug) to fuse #7. One wire was for the fuel pump and the other for the gauges.
I hope this helps you.
Jim
