HC Deb 24 May 1973 vol 857 cc653-4
16. Mr Lamont

asked the Chancellor of the Exchequer what plans he has for the reform of the international monetary system.

Mr. Barber

At the March meeting of the Committee of Twenty, deputies were given instructions on an accelerated programme of work and the preparation of a draft outline of reform in which major issues of principle would be identified for decision. Deputies are meeting all this week in Washington to push ahead with this work.

Mr. Lamont

Does my right hon. Friend agree that had it not been for the floating of the major currencies of the world the recent pressure on the dollar and soaring gold prices would have led to a major international currency crisis? Is it not highly desirable that this new flexibility in the international monetary system should continue as a permanent feature?

Mr. Barber

There are arguments for and against the proposition put by my hon. Friend. I am certain that we must push ahead—and I know that I have the backing of all right hon. and hon. Members who have studied these matters—with the programme for the reform of the monetary system. It was because, at the ministerial meeting in Washington in March, I felt that we were not making the progress that we should be making that I put forward in some detail proposals for a specific plan of work. These proposals are being considered in Washington this week by the deputies. I very much hope that it will not be too long before we are able to have another ministerial meeting, when we shall be confronted with the issues on which we shall have to take decisions.

Dr. Gilbert

I congratulate the right hon. Gentleman on continually paying lip service to the idea of fixed exchange rates and in practice doing nothing about them. Has he any evidence that this period of floating exchange rates has produced any damage whatever to British trade or investment?

Mr. Barber

The question whether a particular currency should float in particular circumstances, or whether there should be a fixed exchange rate, is a matter on which there are varying opinions. All I can tell the hon. Gentleman, as I have done before, is that the overwhelming majority of Finance Ministers throughout the world believe that the new monetary system should be based on fixed but adjustable parities.