HC Deb 13 May 1976 vol 911 cc655-7
6. Mr. Ridley

asked the Chancellor of the Exchequer what has been the fall in the value of tthe £ sterling since 5th April 1976 in terms of the United States $.

Mr. Healey

The sterling/dollar rate at the close last night was $1.8390 compared with $1.8675 at the close on 5th April.

Mr. Ridley

Will the Chancellor of the Exchequer explain why the marvellous, superlative, miraculous, ecstatic deal which he has made with the TUC has resulted in a fall in the pound of 3 cents.? Could it be that the real problem is the borrowing requirement and that the deal is in fact irrelevant?

Mr. Healey

The country will notice that the hon. Gentleman regards what has recently happened as a matter for a snigger, but I quote to him the words of the Deputy Governor of the German Bundesbank: The £ is now undervalued and Britain has an excellent chance for an export-led recovery … Over the last six to eight months the social consensus has been re-established in Great Britain between the Government and the trade unions. The social consensus is the decisive factor. As the Shadow Chancellor of the Exchequer has just held up German ways of handling these matters as a model for the United Kingdom, I hope that the hon. Gentleman will have the decency and patriotism to recognise the importance of this statement by the Deputy Governor of the German Central Bank.

Mr. Molloy

Is my right hon. Friend aware that ordinary people, who have accepted the policies of the Government and have made massive sacrifices, are getting somewhat angry about these folk overseas, whoever they are, who seem to be able to influence and damage the pound and the nation, with the support of some members of the Conservative Opposition?

Mr. Healey

I well understand the feeling of the British people about what is happening and their contempt for members of the Conservative Opposition who, in the hope of party political advantage, seek to damage our national interest.

Mr. Nott

When the Chancellor of the Exchequer gets the parity of sterling and the rate of inflation back to the level at which they stood when he took office, he can begin to talk with some justification of a miracle and of being home and dry. So far the Chancellor of the Exchequer is only recovering the consequences of the social contract.

Is the right hon. Gentleman aware that the way in which he deals with these queries at the Dispatch Box—in the manner of Mr. Brezhnev—and the bullying, hectoring attitude he adopts do not carrying any weight either in the House or in the country?

Mr. Healey

I well understand the hon. Gentleman's interest in the minutiae of Soviet policies since his own party has been taken over by Conservative Trotskyites, but, since he mentioned sterling, I am bound to draw his attention to the fact that it was his own Government, when he was a Minister at the Treasury, who decided to float sterling in 1972, consequent upon which there was a heavy and rapid fall in its value.

I draw the hon. Gentleman's attention further to the fact that, according to the right hon. Member for Leeds, North-East (Sir K. Joseph), the inflation in the last two years was caused by the excessive increase in the money supply under the Treasury of which the hon. Member was a Minister in 1973, and that the attempt to make wages keep pace with prices, in spite of the change in import prices in 1974, was attributable wholly to the threshold agreements introduced by his right hon. Friend the then Conservative Prime Minister, under whom he was happy to serve.

Mr. Cormack

On a point of order, Mr. Speaker.

Mr. Speaker

After Questions, if the hon. Gentleman would be so kind.