Balance of Payments

HC Deb 23 May 1972 vol 837 cc1212-3

15. Sir G. Nabarro

asked the Chancellor of the Exchequer whether he will make a statement on the balance of payments in recent months.

Mr. Barber

The current account was in urplus in the first four months of this year, and the underlying balance of payments is sound. Recent trade figures have been distorted by a number of special factors, notably the effects of the coal miners strike.

Last month, we repaid the last of our IMF debts, and for the first time since 1964 we now have no short-term or medium-term official debt outstanding. Our reserves at the end of April stood at the record level of over £2,700 million, and sterling is strong.

Sir G. Nabarro

While congratulating my right hon. Friend on these splendid achievements, may I ask him to direct his attention to the growth of the hire-purchase debt, which was announced yesterday as £1,678 million? Would he consider this in the context of future economic performance?

Mr. Barber

We keep all these matters under review.

Mr. Healey

Would the right hon. Gentleman enlighten the House as to his own interpretation of the extremely worrying recent trade figures? Is he aware that, even taking into account the distorting effect of the coal strike, which we all recognise must have been there, the balance of trade seems to be deteriorating steadily, from a level of £30 million in February to something under £57 million in April? Can he tell the House how soon he expects to implement his undertaking to devalue the £ rather than halt growth?

Mr. Barber

That was not my undertaking. As I said in my Budget Statement—I realise that the right hon. Gentleman was not responsible for these matters in the Opposition at that time—I expected the balance on visible trade to be less favourable this year than last because of the faster growth of imports, but the current balance as a whole should remain in comfortable surplus because of invisible earnings.

Mr. Ian Lloyd

Have the Government in any way altered their policy on the balance between gold and dollars in the central reserve?

Mr. Barber

That raises a wider question. If my hon. Friend will put a Question down specifically directed to it, I shall be happy to answer it.

Mr. Spriggs

The Chancellor spoke about 1964 in an earlier reply. Could he give us the sum of the deficit which the Tory Government left in 1964, after 13 years of Tory rule?

Mr. Barber

I have not got the figure off-hand, but I think that the short and medium-term debt outstanding when we handed over in 1964 was of the order of £70 million. That was all.