HC Deb 25 July 1972 vol 841 cc1526-7
26. Mr. Duffy

asked the Chancellor of the Exchequer if he is satisfied with the present exchange rate of the £ sterling; and if he will make a statement.

49. Mr. Knox

asked the Chancellor of the Exchequer if he will make a statement on the floating of sterling.

Mr. Barber

I am satisfied that it is right to allow the sterling rate to float for the time being. It is too early to draw conclusions from the course of the rate.

Mr. Duffy

How does the Chancellor reconcile the confidence he expressed at the time of floating that the exchange rate of the £ was realistic and should be sustained with the dramatic fall which has taken place since?

Mr. Barber

I said that my observation then was based on what I considered to be objective criteria.

Mr. Pardoe

Is the Chancellor aware that we were very concerned earlier this afternoon when, in reply to his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), one of his hon. Friends expressed ignorance of the connection between the balance of payments and floating the £? Would he like to educate his hon. Friend, or can his right hon. Friend do so for him?

Mr. Barber

I thought that my hon. Friend gave a fully convincing answer.

Mr. Ian Lloyd

Does my right hon. Friend agree that the exchange rate reflects the collective judgment of the overseas financial and trading community and that the best contribution we can make to that in this country is for one-half of the community not to try to get the other half in a half-Nelson?

Mr. Barber

My hon. Friend has made a good point.

Mr. Healey

Can the Chancellor confirm to the House that he informed his respective colleagues in the Common Market countries that he will not peg the £ at a fixed parity until he has got the British rate of inflation down to that of our main competitors in world trade?

Mr. Barber

I dealt with this earlier. If the right hon. Gentleman had listened to what I saidon an earlier occasion, he would have heard me say that it was our intention to return to a fixed rate as soon as conditions permitted. I also said that I hoped it would be possible to bring the floating to an end before 1st January, 1973.