HC Deb 15 February 1973 vol 850 cc1440-4
Q3. Mr James Lamond

asked the Prime Minister if, during his recent visit to the United States, he invited President Nixon to visit Great Britain.

Q5. Mr. Wyn Roberts

asked the Prime Minister if, at his official meetings with President Nixon, he discussed the operation of phase 2 of the American control of prices and incomes and its relevance to the similar phase in this country.

Q9. Dr. Vaughan

asked the Prime Minister if he will make a further statement on his recent discussions with the President of the United States of America.

Q10. Mr. Redmond

asked the Prime Minister if he will make a statement on his discussions with President Nixon.

Q11. Mr. Meacher

asked the Prime Minister if he will make a statement on his talks with President Nixon.

Q12. Mr. Norman Lamont

asked the Prime Minister whether he will make a statement on his talks with President Nixon.

Q13. Mr. Adley

asked the Prime Minister if he will make a statement following his visit to meet President Nixon.

The Prime Minister

As regards an invitation to President Nixon to visit this country, the President knows that he is always welcome here, but he announced before our talks began that he did not plan to visit Europe in the first half of 1973.

On the operation of the United States Government's policies on pay and prices, we were of course already aware of the way in which the United States system operated, but while in Washington I received first-hand accounts both from the President and from Secretary Shultz. On other aspects of my discussions I have nothing to add to what I told the House in answer to Questions on 6th and 13th February.—[Vol. 850, c. 220–3, and c. 1138–9.]

Mr. Lamond

Since the Prime Minister spoke with such admiration of President Nixon's handling of the trade unions in the United States, would it not have been of value to have further discussions with him immediately about what the right hon. Gentleman should do in the present circumstances, instead of truculently complaining that he cannot get British trade union leaders to sell their members down the river—[Interruption.]—through the gas strike?

The Prime Minister

When asked about this matter I told the House that the America trade union movement was co-operating fully with the President, even though it had very deep political differences with him. I was perfectly entitled, yesterday, to ask the TUC for its co-operation in helping the nation to beat the problem of inflation.

Mr. Roberts

Does the fact that my right hon. Friend now regards international monetary reform as a top priority mean that he attaches less or no importance to European economic and monetary reform?

The Prime Minister

No, Sir, not at all. I said yesterday in a speech to the American Chamber of Commerce that it was essential for the Community urgently to formulate its own position so that we could help to put drive into the general movement to get international monetary reform. I think the events of the last 10 days have indicated more clearly than ever how essential it is to achieve monetary reform, because every individual country, even those as powerful as the United States or Germany, is at the mercy of vast movements of liquid money right across the world at any time, without any relationship to the economic position of those countries.

Mr. Edelman

Will the Prime Minister say whether he discussed with the President the possibility of a tripartite collaboration between the United States, Britain and France in connection with the development of Concorde?

The Prime Minister

We did not discuss that in any detail. It is obviously a matter for the companies concerned. It has sometimes been mentioned, but not, I think, seriously studied—and not so much about the present Concorde as about any future "stretched" version of the aircraft.

Dr. Vaughan

Following the Prime Minister's speech yesterday to the American Chamber of Commerce and his answer just now, will he say a little more about what progress he thinks could be made within the Community towards achieving greater flexibility of monetary rates?

The Prime Minister

There were discussions between the Finance Ministers of the Community yesterday on the events of the last 10 days, the lessons to be learned from them, and how the Community can develop its own policy. In the course of an answer like this I would not expect to go into detail about possible arrangements. It is essential, however, that the Community should formulate its position for the Committee of Twenty, so that we can make more rapid progress.

Mr. Meacher

Did the Prime Minister discuss the possibility of dollar and sterling devaluation, and did he recall his statement of November 1967 that devaluation was a confession of failure and of defeat? When will the Prime Minister have the decency to admit that the responsibility for two confessions of failure and two defeats in the last two years rests on him and on him alone?

The Prime Minister

Obviously the question of sterling devaluation was not discussed, because sterling is floating—[Interruption.]—and the dollar was a matter which was obviously discussed between President Nixon, Mr. Shultz and myself, but those discussions were confidential.

Mr. Redmond

When President Nixon comes to this country will my right hon. Friend send Concorde to bring him over, in order to make it clear that the Government will not lose their nerve over Concorde as the Labour Government lost it over the TSR2?

The Prime Minister

I think that the President realises that already.

Mr. Thorpe

Reverting to the question of the monetary situation, does the Prime Minister agree that one of the reasons why sterling has not been subjected to all the pressures put upon other currencies during the last crisis is that sterling has been floating? If that is the case, will the Prime Minister say why the Chancellor of the Exchequer, apparently echoing the Prime Minister's view, is so determined to re-fix sterling and make it more vulnerable?

The Prime Minister

The right hon. Gentleman must recognise that there are many aspects to the he problem, and that different solutions are possible. If we are to make progress towards an integrated economic community, which is what the right hon. Gentleman wants, it is desirable that we should have an integrated currency system in which the parities are fixed but which can also be changed when required.

The question of what the relationship of that system would be with the dollar or with other currencies is also a matter for discussion and resolution in an international context, and that is why it is so important that we should get on with international monetary reforms.

Mr. Adley

Did my right hon. Friend have a chance to discuss with the President the changed and changing relationship between the United States, Europe and China? Did my right hon. Friend express to the President the view which is held by many people in this country that China represents a great and expanding potential market for European exports, particularly aero-space exports?

The Prime Minister

Yes, we discussed that matter and we fully recognised the potentialities to which my hon. Friend has drawn attention, as does President Nixon. We have diplomatic and trade relations and it is open to us to exploit the situation as far as we can. It must be recognised, however, that because of the system of financing her trade upon which the Government in Peking at the moment insists it is not likely that the growth of trade will be as fast as some of our trade with countries where we can help with export credit guarantees, and so on.

Mr. Michael Foot

Now that the Prime Minister has been converted to the policy of full-hearted floating, will he give an undertaking that he will not return to the undertakings he gave at the summit, or on the question of fixed parities?

The Prime Minister

I fully adhere to the undertaking I gave that the best system for an integrated community is one of fixed and adjustable parities. I fully adhere to that, and I believe that we must solve the problems which arise from it. [Interruption.] If we are to have an integrated Community we must have fixed parities, and should the strain become too great we must be able to move that parity and achieve the result we want. That, I believe, is a desirable system for the Community.