HC Deb 18 May 1971 vol 817 cc1066-7
19. Mr. Bruce-Gardyne

asked the Chancellor of the Exchequer what was the value of sterling balances at the time of signature of the Basle Agreement, and at the latest date for which figures are available.

Mr. Maurice Macmillan

At end-September, 1968, the month in which the Basle Facility and the Sterling Agreements were concluded, gross overseas sterling area official and private sterling holdings amounted to £2,788 million. At December, 1970, they stood at £3,525 million.

Mr. Bruce-Gardyne

Will my hon. Friend tell the House whether the Government welcome or deplore the build-up of these potentially volatile claims against the central reserves since the signature of this Agreement? If the Government were faced with a choice between exchanging the present dollar guarantee for institutional holdings for a gold guarantee and allowing institutional holdings to be run down, would he choose the latter course?

Mr. Macmillan

Despite the fascination of my hon. Friend's argument, I will not be drawn into answering a hypothetical question. On the first part of the supplementary question, the answer can be implied from a knowledge of what the increase is and what the reasons for it are. About half the total increase represents the rebuilding of sterling holdings which were run down during the period between devaluation and the negotiations for the sterling agreement. The other half reflects the proportion of the increase in total reserves of the overseas sterling area countries which comes from their overall substantial balance of payments surplus.