§ Q4. Mr. Gwilym Robertsasked the Prime Minister when he will now visit the United States of America to discuss with President Johnson questions of international liquidity.
§ The Prime MinisterAs the House knows, I have no present plans to visit 911 the United States, but Her Majesty's Government are, of course, in frequent and close touch with the American Administration on all matters of common concern, including international liquidity.
§ Mr. RobertsWould not my right hon. Friend accept, however, that, in view of the vital need for international liquidity, there is urgent need for talks on this matter at the highest level? Would he accept that in this field, as in many others, we have a great deal of common interest with the United States?
§ The Prime MinisterYes, Sir. My hon. Friend will no doubt have been glad to see the progress which, although slow for a long time, has recently been made on the special drawing rights and also the progress made at the recent Stockholm conference, when my right hon. Friend the Chancellor of the Exchequer represented this country. We are in the closest touch with the United States. I have been in touch at various times with President Johnson and my right hon. Friend the Chancellor of the Exchequer is in very close touch with Mr. Secretary Fowler.
§ Mr. Ian LloydCan the Prime Minister say whether the recent attempts to insulate gold stocks by the Group of Ten against gold speculation are being successful?
§ The Prime MinisterI think that the general view of City commentators as well as bankers and other observers is that the two-tier system has got off to a reasonably successful start—perhaps more successful than some pessimists thought. Of course, there have been upsets in the market, not least because of events in France and South Africa. But the United States and Britain are aware, of course, that the scheme depends on both getting their balance of payments into equilibrium as soon as possible.
§ Mr. CantDoes not my right hon. Friend agree that the international liquidity problem for us is not associated with the drawing rights but with the capacity of this country to absorb short-term assets from abroad into our secondary banking system, which makes us increasingly vulnerable as a nation to trends in the financial world outside?
§ The Prime MinisterI have heard my hon. Friend on this subject a number of 912 times, and everyone recognises the vulnerability created for sterling by its being not only a reserve currency but an international trading currency widely accepted and used for trade. One of the most important steps is the efforts being made through the Basle mechanism to deal with the problem of the sterling balances.