HC Deb 13 June 1968 vol 766 cc428-9
Ql. Mr. Winnick

asked the Prime Minister if he intends to visit President Johnson to discuss economic matters relating to Great Britain and the United States of America.

The Prime Minister (Mr. Harold Wilson)

I have no present plans for a meeting with President Johnson, Sir.

Mr. Winnick

Are the British Government in contact with the American President over the present negotiations which are apparently going on for an international loan? Are we also discussing with the American President the future position of the sterling balances?

The Prime Minister

As I am sure my hon. Friend will recognise, my right hon. Friend the Chancellor of the Exchequer is in close touch with his opposite numbers in the United States and in the European countries principally involved.

Mr. Heath

Can the Prime Minister clarify two points? First, was the recent drawing on the I.M.F. of 1,400 million dollars to replace existing short-term indebtedness to the central banks, and did it completely replace it? Secondly, are the further discussions which are going on in Basle arrangements to replace other existing short-term indebtedness or to be an addition to the short-term indebtedness to cover the withdrawals of the sterling balances where they are being diversified?

The Prime Minister

I do not think that I should say too much about the Basle discussions while they are still going on, although the right hon. Gentleman will have seen a number of Press stories emanating from Basle linking the discussions with the general future of sterling balances—something which I think has been often raised from all parts of the House in our financial discussions. On the first part of the right hon. Gentleman's question, the drawing from the International Monetary Fund has been used for the purpose to which he referred, namely, for reconstitution loan arrangements of that kind.

Mr. Heath

Did it completely replace that central bank borrowing, or is there still some outstanding? Secondly, cannot the Prime Minister tell the purpose of the discussions in Basle? I am not asking for the figures, but is the purpose to cover further withdrawals of the sterling balances or to replace existing debt?

The Prime Minister

On the first question, it is not the practice ever to disclose the extent of short-term swap arrangements, and it has not been so under successive Governments. So perhaps the right hon. Gentleman will leave that question with me. I will see if anything further can be said by the Chancellor or myself, but off the cuff I think that it would be contrary to previous practice.

With regard to the Basle discussions, as I have said—I thought it better to refer to the not all that inaccurate newspaper reports—their purpose relates to the question of sterling balances over a relatively long period ahead. They are not related to the question of short-term borrowing in relation to our balance of payments problems at any given time. They are related principally to the sterling area.