HC Deb 27 November 1952 vol 508 cc590-3
11. Mr. Bence

asked the Chancellor of the Exchequer what estimate he has made of the increases which would be made in the gold and dollar balances of the sterling area if the dollar price of gold produced in the sterling area was related to world commodity prices.

Mr. Maudling

Many estimates of this kind have been made, but the results vary very widely according to the base period adopted for the comparison, and to a lesser extent according to the commodity price index employed.

Mr. Bence

That is rather an ambiguous answer, if I may say so. Would the hon. Gentleman not agree that, on a general observation of the position, if the discrimination shown by the American monetary authorities against a large sterling dollar product were eliminated it may be that the sterling dollar balances would be considerably increased?

Mr. Maudling

It may be an ambiguous answer, but it was an ambiguous Question. Taking the 1938 relationship between gold and commodities, the value of the gold reserves would be increased. Taking the 1928 relationship, the value of the gold reserves would be decreased. If the hon. Gentleman has any particular years in mind for comparison, I shall be glad to give him the figures.

Mr. Stokes

Does not the hon. Gentleman understand that what my hon. Friend is getting at is that the price of commodities has gone up enormously and gold has not? In fact, gold is now so expensive to produce that nobody can afford to produce it, which is a ridiculous position. What would be the effect if, for example, the dollar price of gold were doubled?

Mr. Maudling

If the right hon. Gentleman would put a Question down I shall be glad to find the answer.

31. Mr. Stokes

asked the Chancellor of the Exchequer whether he will insist on a revaluation of gold in terms of dollars to a figure in keeping with the rise in commodity prices since 1939 before agreeing to free convertibility of the £ sterling.

Mr. Maudling

The right hon. Gentleman will not expect a reply to a hypothetical question.

Mr. Stokes

On the contrary, I do. I am sure the Minister knows well enough that I put the Question down to get a reply. Is he aware that the price of gold is now at such a ridiculous level that it is almost uneconomical to produce it, yet it is so valuable that it forms the basis of all our currency arrangements? Surely he has a proper answer to give to my Question.

Mr. Maudling

I think it would be not proper, but improper, if I were to answer the right hon. Gentleman's hypothetical question. I appreciate the importance of the matter, and the right hon. Gentleman's concern that it should be kept constantly before the House and the country, but I cannot make any further statement.

Mr. Gaitskell

Can we take it that the Commonwealth conference will be discussing the whole question of the price of gold?

Mr. Maudling

That is the sort of question which would probably be considered, but I cannot state exactly what is to be considered.

Mr. Dudley Williams

Is my hon. Friend aware that this matter is causing great dissatisfaction on both sides of the House, and will he make it clear to the Americans at every conceivable opportunity that it is time that this injustice to the sterling area was righted?

Mr. Maudling

As I said, this is a very important question indeed, but it is also a very complicated question and I cannot make any further statement.

Lieut.-Colonel Lipton

Will the hon. Gentleman have a word with the former Minister of State for Economic Affairs about this matter?

32. Mr. Stokes

asked the Chancellor of the Exchequer whether he is aware that only 68 gold mines are now in production in Canada, compared with 160 in 1942, owing to the fact that the cost of production is now higher than the artificially fixed price of gold; and what representations he proposes to make in collaboration with the Canadian Government to get an adjustment in price sufficient to enable the gold companies both in Canada and the Gold Coast to operate effectively.

Mr. Maudling

I am not aware of all the reasons for the decrease in the number of gold mines in production in Canada since 1942. I regret that I have nothing further to say on behalf of Her Majesty's Government at present.

Mr. Stokes

Has the Minister read the reports from Ottawa dated about the 12th of this month? Is it not rather extraordinary that this valuable metal, so valuable that it is the basis on which all our currencies are founded, is now so costly to produce in terms of its present valuation that nobody can afford to produce it? Are we not getting into an absurd muddle?

Mr. Maudling

Her Majesty's Government are not getting into any muddle. I understand that the variation in gold production in Canada is not a matter for my right hon. Friend.

Mr. Stokes

If the Minister will study the reports he will see that it is clear that those mines have closed because they cannot afford to produce, with gold at 35 dollars per fine ounce. What does the Minister propose to do about it to help the Canadian Government?

Mr. Maudling

I do not think that my right hon. Friend is responsible to the House of Commons for that particular matter.