HC Deb 17 February 1970 vol 796 cc201-2
33. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer what further progress has been made to date concerning his proposal for wider parity bands and other proposals for more flexible exchange rates.

Mr. Roy Jenkins

Various proposals for a more flexible exchange rate system are at present undergoing thorough study in the I.M.F. Executive Board.

Mr. Bruce-Gardyne

Is it not rather disappointing that more use has not apparently been made of the present lull between currency storms to render the system more flexible? In particular, what progress, if any, has been made with, I think, the German proposal for abolishing the upper limits of the parity band?

Mr. Jenkins

I am not aware of any formal German proposal of that sort. The study is going on certainly at least as fast as other countries wish it to. All matters of international monetary cooperation must be matters of co-operation: it would be impossible to make the studies, even if they were likely to lead to anything valuable, more quickly.

Mr. Barnett

Would my right hon. Friend at least deny reports that he is apparently not prepared to consider—that he has, indeed, closed his mind to this question—possibly bringing in crawling pegs or sliding rates? Would he also confirm that he would allow at least the present amount allowed of a 1 per cent. move up or down, which has not been used in recent years?

Mr. Jenkins

The question of crawling pegs can no doubt be studied, but I detect no enthusiasm for this proposal on the part of any major country at present. In Washington, I found myself somewhat more adventurous than almost any other Finance Minister on this and related subjects. As for the upper limit of the parity, my hon. Friend may be becoming worried that the £ will be pressing against the ceiling soon. He is a little premature, but we will consider that problem when it becomes necessary.