HC Deb 14 December 1971 vol 828 cc251-4
24. Mr. Pardoe

asked the Chancellor of the Exchequer if he will make a further statement about Her Majesty's Government's policy towards the floating pound.

26. Mr. Rost

asked the Chancellor of the Exchequer whether he is satisfied with. the outcome of the recent international monetary talks in Rome; and if he will make a statement.

33. Mr. Dalyell

asked the Chancellor of the Exchequer if he will make a statement on his official discussions with the Group of Ten in Rome.

34. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer if he will make a statement on the Rome meeting of Ministers of the Group of Ten.

45. Mr. Tugendhat

asked the Chancellor of the Exchequer whether he will make a statement on the latest developments in the world monetary situation.

Mr. Barber

I have already reported to the House on the meeting of the Group of Ten which took place in Rome on 30th November and 1st December. I leave tomorrow for a further meeting in Washington. I shall go to that meeting ready to agree a settlement and I believe that a settlement at that meeting is possible. I would add, however, that the problems are complex and a solution does not depend only on the United Kingdom. Consequently, while I hope for a settlement at Washington, I should not be unduly surprised if there had to be a further meeting. On the subject of floating exchange rates, I have nothing to add to what I said on 23rd November. —[Vol. 826, c. 1109–10.]

Mr. Pardoe

I thank the right hon. Gentleman for that very full reply. Could he say whether the one per cent. rise in intervention level this week means that the Government have now accepted a virtual revaluing of the pound against the dollar of 5 per cent., and is the Government aiming at a 6 per cent. band around 2–52 dollars to the pound? Will he also say whether the C.B.I.'s stated opposition to a return to a fixed exchange rate has now at last convinced him of the Liberal view that a return to a fixed exchange rate would be an act of sabotage to our economic growth?

Mr. Barber

On earlier matters I said that I did not believe it would be helpful to comment. I believe that a return to a realistic pattern of parities is in our best interests and in the interests of the world. This is the view of all the members of the Group of Ten.

Mr. Rost

Does my right hon. Friend accept that an early settlement of the international monetary and trade crisis is a matter of priority if business confidence is not to be undermined? May I take it that he will do everything possible when in Washington to reach a settlement?

Mr. Barber

I agree that this is a matter of great importance, and I shall go to the meeting in Washington ready to agree a settlement. But there are problems involved, and it is not a matter only for the United Kingdom.

Mr. Dalyell

Are British and American national unemployment problems on the agenda in Washington?

Hon. Members

Answer.

Mr. Barber

If the hon. Gentleman wishes to have an answer, I will give him one. [HON. MEMBERS: "He is looking it up."] I am looking at what I have said before on this matter, which the hon. Gentleman knows perfectly well. What I have said is: My first duty is to ensure that such a settlement does not prejudice our own competitive position and in particular that it does not threaten our plans for reducing unemployment by faster economic growth. That remains our policy.

Mr. Bruce-Gardyne

Is it not by now evident that the United States needs a settlement of the situation created by its 15th August measures at least as much as, if not more than, the nations of Western Europe; and that the first priority should be the abolition of the import surcharge and the discriminatory tax measures, which are in defiance of G.A.T.T.?

Mr. Barber

Certainly any settlement concerning currencies, the import surcharge and the discriminatory tax will have to come as part of the overall bargain. I believe that a realistic settlement is not only in the interests of the United States, ourselves and members of the Group of Ten but also in the interests of all those other members of the I.M.F. who are not represented at the Group of Ten meetings, including the developing countries which have been seriously affected as a result of the decisions.

Mr. Roy Jenkins

Will the right hon. Gentleman bear in mind that, while I agree with him that it is desirable in the interests of all concerned that a settlement should if possible be reached at the meeting, at this stage it should not be too rigid a settlement? The issues raised involve a fundamental re-look at the international monetary situation and this will take some time to achieve. In the meantime, will he ensure that neither we nor anybody else get boxed in with a parity which might be damaging for the future?

Mr. Barber

It is true, as the right hon. Gentleman implies, that recently we have been concentrating on the short-term problem and all the talk has been about that. But, as the right hon. Gentleman knows from his time as Chancellor, it is true from our point of view that we should achieve a sensible long-term reform. I hope we shall be able to proceed a little faster with this, though I remind him that discussion is now proceeding in the I.M.F. about the longer-term reform.