HC Deb 13 May 1969 vol 783 cc1211-3
24. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer what plans he has made against the repetition of large scale speculative movements out of sterling into Deutschemarks.

Mr. Harold Lever

The hon. Member will have seen that the central bankers meeting in Basle announced on 11th May their agreement to take action to recycle the speculative flow of recent weeks, and to remain in contact in order to decide upon further measures if they should prove necessary.

Mr. Bruce-Gardyne

I am sure that the Financial Secretary has no more faith in that arrangement than anybody else. Will the hon. Gentleman tell us whether any loans that we receive as part of the recycling arrangements will be denominated in dollars and, therefore, not subject to the revaluation of the Deutsche mark? Has his right hon. Friend considered imposing discriminatory quotas on German exports to this country meanwhile, and urging his colleagues in the I.M.F. to do likewise?

Mr. Lever

On the first part of the Question, it may suit the hon. Gentleman to trumpet the calamity of some international monetary co-operation and to deny the effectiveness of others. The fact remains that this is a valuable international co-operative action, for the benefit of the whole world, to prevent our economic plans being pushed aside by these vast speculative movements.

I think that it is both unwise and unjust to make a judgment upon the German Government, which has its own particular democratic difficulties with its own people. I think that the hon. Gentleman's comment is too superficial to warrant any answer.

Mr. Tinn

Will the Financial Secretary accept from me, as a Member not given to panic based on Press rumours, that it will be very difficult for many Members representing development areas to support the Government in any measures which give priority to safeguarding the balance of payments and the exchange rate at the expense of the development areas?

Mr. Lever

I recognise my hon. Friend's anxieties, but I find it difficult to know on what basis, other than newspaper headlines, he brings them to us. But let me assure him that the anxieties that he has outlined are entirely without foundation. The development of the regions and our policy towards them is not in question.

Mr. Maudling

In brushing aside the comment of my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) the Financial Secretary ignored his very important question. Can he assure us that any recycling loans coming to this country from Germany will be denominated in dollars, not Deutsche marks?

Mr. Lever

I can assure the right hon. Gentleman that the recycling arrangements will be to the advantage of this country as well as other countries. [HON. MEMBERS: "Answer."]—I do not know whether right hon. and hon. Gentlemen opposite really think that international financial negotiations of this kind are best conducted on the Floor of the House. I do not.

Mr. Thorpe

Will the Financial Secretary agree that the events not only of the past few weeks, but of the east few months, show how extraordinarily fragile and artificial is the whole basis of the international monetary system? Should not the first priority of the Government be to press towards greater flexibility in exchange rates and the possibility of a new European reserve currency?

Mr. Lever

The lesson that I read from recent events internationally in the monetary sphere is that there is now a greater degree of co-operation between nations than has ever been seen in world history, and much to the advantage of the world. I am not able to adopt the latter part of the right hon. Gentleman's suggestion.

Mr. Heath

The House recognises that negotiations of an international nature must often be carried on in confidence. But this afternoon the Financial Secretary has deliberately pursued a course of evasion in answering Questions which deserved answers. Have not he and the Government yet learned that far more damage is caused to currencies and to international trade by such a deliberate policy of evasion instead of telling the House what the true position is?

Mr. Lever

There has been no evasion on my part. I have been asked particulars about discussions which are, always have been, and necessarily must be, confidential. In my anxiety to please and and inform the House, I cannot give way, as I gladly would, and remove many doubts which are causing anxieties in the minds of my hon. Friends, because these discussions are confidential. But when the due time arrives, they will be fully discussed and all these points will be fully answered.

The only thing which I have refused to do is to go into details of what currencies and recycling takes place. I will be asked next what amount is involved, who is lending, who is taking, and the like. I must refuse, in the national interest, to answer such Questions.

Mr. Bruce-Gardyne

On a point of order. In view of the unsatisfactory nature of that reply, I beg leave to give notice that I will seek to raise the matter on the Adjournment at the earliest opportunity.