HC Deb 27 April 1978 vol 948 cc1626-8
9. Mr. Crawford

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

17. Mr. Gould

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

Mr. Denzil Davies

My right hon. Friend maintains 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

Will the Minister tell the Governor of the Bank of England that if the Government do not accede to the SNP demand that there be a 2p cut in the standard rate of income tax, the Budget strategy will be in ruins? Does the Minister understand that the SNP, unlike other parties in the House, is in deadly earnest about this?

Mr. Davies

After the Garscadden by-election, I am not sure whether the SNP is in a position to make demands on anybody. Indeed, after the next General Election there will be fewer SNP Members here to make such demands.

Mr. Gould

In view of the welcome given by industry to the more competitive pound, will my right hon. Friend instruct the Bank of England to take an equally relaxed view, and make it clear that, far from spending £100 million per day from the reserves, it should neither raise interest rates nor use money from the reserves in futile and damaging attempts to prop up the exchange rate?

Mr. Davies

My hon. Friend's views on this matter are well known. It is not true to say that the whole of industry always welcomes the depreciation of the pound. Some companies do well and some do not, as a result of it. In our case the main problem is not price competitiveness but, rather, the quality, design and nature of the products that we sell. If we can make them better, we shall solve our industrial problems.

Mr. Ian Stewart

Do the Government these days have a policy on exchange rates? If so, is the decline in the value of the pound since the Budget inconsistent with it?

Mr. Davies

The Government do have a policy on the exchange rate, but I cannot tell the hon. Gentleman.

Mr. Wrigglesworth

Is my right hon. Friend aware that more than 100 of his right hon. and hon. Friends have put their names to a motion asking for statutory powers for the Council for the Securities Industry—the new Council which is to supervise the City? Will he consult the Governor of the Bank of England about this matter and see whether statutory powers, or at least public participation, can be introduced in respect of this body?

Mr. Davies

I am well aware of the motion that has been put down. My hon. Friend will appreciate that this is primarily a matter for my right hon. Friend the Secretary of State for Trade, who, I believe, has had consultations with the Bank of England about this matter.

Mr. Burden

When he next meets the Governor of the Bank of England, will the Chancellor announce when the Government intend to keep their promise to repay the first £1 billion of the IMF loan? Until such loans are repaid, the Government are under an obligation to carry out the economic policy that was imposed when the IMF made the loan.

Mr. Davies

As the hon. Gentleman will know, the Government are repaying money that they borrowed from the IMF. I am sure that he and his hon Friends welcome that development.

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