§ 16. Mr. Deakinsasked the Chancellor of the Exchequer if the Government have agreed with France any limitations on their freedom of action with regard to the sterling balances.
§ Mr. BarberI have nothing to add to the very full statements made by my right hon. Friend the Prime Minister on 24th May and 10th June.
§ Mr. DeakinsIs the right hon. Gentleman aware that, in view of the tremendous strains to be expected on our balance of payments during and beyond the transitional period before entry into the Community, the Government should make clear to the Six that no rundown of sterling balances can begin until we have solved our balance of payments problems associated with entry, even if by 1980 monetary and economic union has been achieved?
§ Mr. BarberThe hon. Gentleman will recall that on the previous occasion when I dealt with this Question, before the Prime Minister's statements, I made it clear that if one is considering phasing out sterling's reserve rôle, one factor to be taken into account is that we would have to find a means to avoid an unacceptable burden being borne by the United Kingdom. That remains the position.
§ Mr. Roy JenkinsHas the right hon. Gentleman not contemplated a means which would be beneficial and in relation to which there is no burden, unacceptable or intolerable, by which these balances, which were a form of world liquidity, perhaps to a greater extent than today, can be taken over, though with a debit balance to us, by some other organisation?
§ Mr. BarberIt is true that the rundown of sterling's reserve rôle—and I agree with the right hon. Gentleman on this—implies the replacement of sterling balances, or the greater part of them, by some alternative assets. Clearly, arrangements would have to be made for sterling holders to acquire these assets and for the United Kingdom to undertake some alternative liability, but all this would require international discussion and co-operation with those concerned.