HC Deb 24 October 1972 vol 843 cc974-5
12. Mr. Norman Lamont

asked the Chancellor of the Exchequer what is the current level of the official gold and foreign currency reserves; and how this compares with the level in June, 1970.

Mr. Higgins

Converted at par, the reserves stood at £2,337 million at end-September this year compared with £1,163 million at end-June, 1970.

Mr. Lamont

While congratulating the Government on these figures, may I urge them not to fritter away the hard-earned reserves by returning to a fixed parity? Will they instead allow the £ to find its own level for as long as possible?

Mr. Higgins

I could not agree with my hon. Friend there. My right hon. Friend has made clear what our intentions are with regard to the question of floating and fixed parities.

Mr. Sheldon

Before the hon. Gentleman accepts these congratulations too wholeheartedly, will he accept that it was only the floating of the £, which came about as a result of the massive outflow of funds, which prevented the gold and dollar reserves from falling catastrophically? Does he agree that it was only the effective devaluation of the £ which brought this money, of which he is now boasting, back to this country?

Mr. Higgins

I do not think that hon. Gentlemen should confuse the fact that we are floating with the question of the rate. The fact is that we did take rapid action in the light of currency flows, in marked contrast with hon. Gentlemen opposite who did not do so, with disastrous results on our reserves.