HC Deb 26 January 1971 vol 810 cc312-3
Q1. Mr. Barnett

asked the Prime Minister what discussions he had on his recent talks with President Nixon about international co-operation to deal with the world problem of inflation.

The Prime Minister (Mr. Edward Heath)

The details of my discussions with President Nixon are confidential.

Mr. Barnett

While the right hon. Gentleman was away, did he notice that the Government's policy of attempting to beat inflation by acting directly on the public sector was not providing the example they expected on the private sector, in so far as wage settlements—the Chrysler settlement, for example—were not being affected at all? Does he confirm that he still does not intend to do anything about inflation?

The Prime Minister

The hon. Gentleman's Question was about international co-operation with other countries. It is not possible to compare exactly the circumstances of one country with those of another in relation to inflation. I believe that the policy which we are carrying out—that of dealing with those sectors for which we are, directly or indirectly, responsible—is right. If the Opposition want another period of direct statutory wage and price control, they had better say so.

Mr. Bruce-Gardyne

Did my right hon. Friend have any discussions with President Nixon about the possible desirability, at any rate for a time, of suspending the upper limit of the parity of the £ sterling in order to discourage a flow of funds across the Atlantic resulting from differential interest rate policies on either side of the Atlantic, since such a flow might have a deleterious effect on the Government's domestic monetary policies?

The Prime Minister

No, Sir. We did not discuss that technical matter.

Mr. Roy Jenkins

Can the right hon. Gentleman tell us whether the Government's policy for containing inflation in the private sector is based primarily upon general monetary controls? If so, does he regard this as being effective upon an international company like Chrysler?

The Prime Minister

We shall make use of all the economic weapons freely available to us. International companies must reach their own conclusions but they also are bound to be affected by the general economic situation, especially in relation to exports.