Should I fill this hole in my exterior wall?

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Hi all,
I was just prepping my bay window (house is 1960s with cavity walls) for a lick of paint. I removed a metal grill on the front to find a large hole had beed drilled in it, stuffed inside were at least 2 jay cloths... This can't be right can it?

Inside the bay we struggle with damp, perhaps the hole was drilled to try and ventilate the damp away? Then stuffing jay cloths in there would only have added to the problems by bridging the cavity!

Either way can anybody confirm my suspicions that if I close up this hole with exterior filler (toupret?) and paint with some sandtex masonry paint it can only improve the situation? Are there any risks to doing this?

Thanks in advance!
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sorry I've posted this on the working place, Could a mod please move this to general DIY?
 
Nope house is on a slab so no suspended floors :giggle:. Thanks for the advice
 
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