§ The Chancellor of the Exchequer (Mr. Denis Healey)As the House knows, the Government have been concerned to remove the pressures exerted on the sterling exchange rate by the overhang of the sterling balances. Considerable work has already been done on this problem in the Bank for International Settlements in Basle, where Central Bank Governors have had 1536 constructive discussions over the last weekend. At the same time, the matter is also under discussion with the Treasury and the Federal Reserve in Washington. These talks have revealed a general desire on the part of those concerned to achieve a satisfactory arrangement for the sterling balances, and I believe it will be possible to reach an agreement before long.
I am also glad to be able to tell the House that during the period ahead and in anticipation of further drawings under the agreement with the IMF which will take place later in the year, I intend to strengthen the reserves with $500 million which has been offered by the United States Treasury and the Federal Reserve in the form of swaps. In addition, the Bundesbank has offered the Bank of England a standby facility of $350 million by way of further support.
§ Mr. Peter Rost (Derbyshire, South-East)The right hon. Gentleman is giving away our sovereignty.
§ Mr. HealeyThe endorsement of our policies by the International Monetary Fund and the members of the General Arrangements to Borrow will relieve the pressures on sterling which have damaged our economic prospects in the last 12 months, while the prospective arrangement for the sterling balances will help to reduce the risk of such pressures in future years. This should do much to restore the confidence on which all aspects of our economic performance critically depend.