HC Deb 28 January 1969 vol 776 cc1086-8
10. Sir B. Rhys Williams

asked the Chancellor of the Exchequer what steps he has taken since the monthly meeting of the Bank for International Settlements in December to obtain international agreement to a new system for obtaining orderly movements in exchange rates; and if he will make a statement.

15. Mr. Sheldon

asked the Chancellor of the Exchequer if he will make a statement on the international monetary situation.

29. Mr. Cronin

asked the Chancellor of the Exchequer what progress has been made in discussions on the international monetary situation.

Mr. Roy Jenkins

As I said to the House on 25th November, I think it is right that we should think carefully and afresh about the present international monetary system. This process is bound to take some time and I do not think that an international conference would be helpful at this stage. Meanwhile we must work with the present system, improving it as we can, for example by bringing the scheme for special drawing rights into operation as soon as possible.

Sir B. Rhys Williams

Is it not obvious that all currencies are more or less subject to inflation and that therefore over the course of time they are bound to diverge in value? Would it not be better to take account of this fact by an orderly system of variations in exchange rates instead of waiting until it is inevitable to make some catastrophic movement?

Mr. Jenkins

I do not follow the hon. Baronet's argument. To the extent that all the currencies are subject to inflation there is no reason why they should diverge in value. If they do diverge in value, it is for reasons different from that. I am not convinced that a change such as the hon. Baronet suggests would necessarily be the best way of bringing about orderly movements.

Mr. Sheldon

Since the new American Administration have taken over the previous one's responsibility for the price of gold and accepted their view, will my right hon. Friend consider that, although it may not be necessary to have these big international conferences, what might be very helpful would be to continue discussions with interested Governments so that at least some progress is being made at this level?

Mr. Jenkins

It is desirable to have discussions with interested Governments on a very wide range of subjects, and I shall certainly welcome these with the new United States Administration and the new United States Secretary to the Treasury. I do not think that it is desirable to raise a wide range of issues and I do not think that an ill-prepared major international monetary conference would help to give stability to the present situation.

Mr. Cronin

I congratulate my right hon. Friend on the admirable progress which has been made so far, particularly at Basle. Will he nevertheless consider having informal discussions with a view to strengthening swap arrangements and increasing their flexibility?

Mr. Jenkins

I am grateful for what my hon. Friend has said. I will continue to consider all these matters.

Mr. Biggs-Davison

Has the Commonwealth Economic Consultative Council instituted any study of this important matter which was mentioned at the Conference of Commonwealth Prime Ministers recently?

Mr. Jenkins

I am certainly in constant and rather closer touch than has hitherto been the practice with Commonwealth Finance Ministers.