HC Deb 08 December 1977 vol 940 cc1630-1
10. Mr. Crawford

asked the Chancellor of the Exchequer when he next intends to meet the Governor of the Bank of England.

Mr. Healey

I maintain close contact with the Governor of the Bank of England, meeting him on a regular basis and also as and when circumstances require.

Mr. Crawford

When will the Chancellor discuss with the Governor the implications of last night's House of Commons vote which removed from the forthcoming Scottish Assembly and the Scottish people the need to comply with Treasury laid-down pay policy guidelines? Has the right hon. Gentleman thought about last night's vote?

Mr. Healey

I think about very little else, but I have not yet had the opportunity of discussing this matter with the Governor.

Mr. Wrigglesworth

Does my right hon. Friend agree that the Bank of England plays a very important rôle in the determination of economic policy in this country, and does he agree also that it would be better if the rôle that it played and the advice it gave to the Government were more clearly available in public so that we could determine exactly what its views and its rôle are as against those of the Treasury and the Chancellor himself?

Mr. Healey

The Bank does, indeed, play an important rôle in many aspects of the economy, but my relationship with the Governor is such that I prefer to keep his advice on some matters private, just as I do the advice tendered to me by my own officials and by representatives of Customs and Excise and the Inland Revenue. I think that that is wholly consistent with the general tradition of government in this country. The Governor sometimes makes his views public, and I always read them with intense interest.

Mr. Ian Stewart

How do the Chancellor and the Governor reconcile the huge sales of sterling to foreigners in the first nine months of this year with the Chancellor's stated intention in January to reduce the reserve currency rôle of sterling?

Mr. Healey

The hon. Member knows as well as I do that these substantial sales took place at a time when we were giving priority to our obligation under the agreement that we reached with the IMF to maintain competitiveness without damaging other aspects of our undertakings to the IMF. But, as the hon. Member knows, when we changed our intervention policy in October these inflows ceased. On the other hand, our direct undertakings were primarily concerned with official sterling balances held in London, and those have not changed significantly over the year.