§ 1. Mr. Norman Lamont
asked the Chancellor of the Exchequer what plans the British Government are putting forward for the reform of the international monetary system.
§ The Chancellor of the Exchequer (Mr. Anthony Barber)
At the annual meeting of the International Monetary Fund in 1971 I put forward comprehensive proposals for the reform of the international monetary system. The basis of that scheme is, I believe, now generally accepted. Some of the still unresolved points turn on operational details which are now being closely studied by technical groups under the Committee of Twenty Deputies. When we met in Nairobi last month the Committee of Twenty announced its intention to arrive at final recommendations by 31st July 1974. We shall be meeting again in January and in the spring.
§ Mr. Lamont
Was not one of the areas of disagreement and uncertainty at Nairobi both the criteria for establishing when a country is in fundamental disequilibrium in its balance of payments and the pressures that ought to be applied in that situation? Have the Government now come to a conclusion on the way in which that problem ought to be dealt with? Does not that lie at the centre of the whole problem?
§ Mr. Barber
Those were certainly two of the subjects that we discussed and which we shall certainly have to take further. But I think that the important thing is that the general shape of the 1446 reformed system has been defined and there really has been considerable progress on a number of important issues. After all, we are agreed on the basis of the exchange rate system, and that the SDR will become the principal reserve asset. We have made considerable progress towards a consensus on the adjustment process and on convertibility. In short, I think that we have reached the stage where the immediate need is for deputies to test out and to elaborate the agreement reached in more operational detail. But I am sure that we shall have to pursue further the two points mentioned by my hon. Friend.