HC Deb 09 March 1971 vol 813 cc218-9
1. Sir B. Rhys Williams

asked the Chancellor of the Exchequer what further representation he has made to the International Monetary Fund in regard to further issues of Special Drawing Rights.

The Chancellor of the Exchequer (Mr. Anthony Barber)

None, Sir.

Sir B. Rhys Williams

Would my right hon. Friend agree that the Agreement which permitted the I.M.F. to issue these documents was nothing less than a licence to print money? Recognising the inflationary effect of this, will he use his utmost endeavours to see that no further issues of Special Drawing Rights are made until we have returned to a far greater degree of stability in the values of the world's trading currencies?

Mr. Barber

My hon. Friend's views on this matter are well known, but I am afraid that I cannot go along with him. I take the view that the S.D.R. scheme provides a rational method of meeting the world's needs for liquidity. One must obviously consider the circumstances from time to time. As my hon. Friend will appreciate, the allocation for January, 1972, is already fixed, and we shall have to consider in due course the position for January, 1973.

Mr. Cant

Does the right hon. Gentleman agree with the views of certain central bankers in Europe that the existence of a continued and massive dollar deficit in the balance of payments constitutes a threat to the continued existence of these S.D.R.s?

Mr. Barber

As I have already said, the allocation for January of next year has already been made and decided upon. In due course the Executive Board of the I.M.F., which considers these matters, will no doubt take into account the sort of point the hon. Gentleman made.

Mr. Nott

Is it not possible for the countries which have agreed to the further issue of Special Drawing Rights to change that arrangement? International liquidity is increasing extremely quickly as a result of the growing dollar deficit. Does my right hon. Friend believe that it is in the interests of this country or of any other Western European nation for this paper to be increased?

Mr. Barber

I would certainly not wish to propose any change in the allocation for January, 1972, but I would expect the total amount of world liquidity available to be a determining factor for 1973.