HC Deb 05 May 1953 vol 515 cc197-8
33. Mr. Jay

asked the Chancellor of the Exchequer whether his attention has been called to an official announcement by the Prime Minister of New Zealand that the recent Commonwealth Conference agreed to ask the United States of America virtually to guarantee sterling, so that partial convertibility would follow; and whether he has any statement to make.

Mr. R. A. Butler

Yes, Sir. I have seen reports of a statement by the Prime Minister of New Zealand. I have nothing to add to what I told the House on 17th March, namely, that there are essential pre-requisites to a convertibility operation—the adoption by all concerned of adequate internal and good creditor policies and the assurance of sufficient support.

Mr. Jay

Is it not very unsatisfactory that in a matter of this importance we should still have to rely for our knowledge of Government policy on Press reports from the other end of the world? Can the Chancellor at least confirm or deny the report that the American authorities have now reported unfavourably on his proposals?

Mr. Butler

I do not think anything is quite as simple as the right hon. Gentleman feels. The American authorities are giving close attention to all that we put before them. In certain respects there have been difficulties and obstacles, which have already been mentioned by Her Majesty's Ministers before the House. In other respects I think there is likely to be progress, but I do not think the situation is as simple as the right hon. Gentleman imagines. Secondly, if he wishes to take Her Majesty's Government's policy he should address himself to Her Majesty's Government's Ministers.

Mr. Gaitskell

Will the Chancellor not tell us precisely what this plan for partial convertibility was? Is it not most unsatisfactory that we should only hear bits and pieces of it from other Commonwealth Ministers?

Mr. Butler

The right hon. Gentleman might find it difficult to understand, but I made a statement on 17th March which exactly represents our attitude towards the possibility of convertibility—namely, that first of all this country and other countries concerned have to adopt a right internal policy; secondly, that certain countries, including the United States, should adopt good creditor policies which improve the opportunity of trading with them; and thirdly, if there is to be such an operation, there should be adequate support. Not all of those conditions have yet been fulfilled.

Mr. Gaitskell

They are too vague.

Mr. Jay

The right hon. Gentleman said there was some progress. Could he at least enlighten us by telling us what that progress is?

Mr. Butler

The progress is that the situation internally of the United Kingdom economy is very much improved on the situation when right hon. and hon. Gentlemen opposite were in charge. Inflation has been conquered and the general level of public expenditure has been tackled. Confidence in sterling and the internal policy is very much greater.