International Monetary Fund

HC Deb 27 July 1978 vol 954 cc1782-4

9. Mr. Adley

asked the Chancellor of the Exchequer when he last met the heads of the International Monetary Fund.

Mr. Healey

I last saw Mr. Witteveen, the retiring IMF managing director, and his successor, Mr. Larosiere, in their official capacity at the IMF interim committee meeting in Mexico City at the end of April. I also met Mr. Witteveen again a few weeks later at the OECD meeting in Paris.

Mr. Adley

As we are approaching the manifesto season, would the Chancellor like to tell us whether he followed the advice he received from the IMF because he had to or because he agreed with it? If it was the latter, perhaps he would like to give us an insight into the Labour Party's new economic philosophies by publishing all the correspondence.

Mr. Healey

There is nothing I should like more than to publish my correspondence with the IMF, because it would make such good reading in my election manifesto. If the hon. Gentleman wants to help his party, he must do rather better in his questions than he has this afternoon.

Mr. Ron Thomas

When my right hon. Friend meets members of the IMF, will he make it clear to them that the British trade union movement is opposed to his 5 per cent. pay policy because it realises that if a trade unionist cannot get the full benefit of a legitimate pay claim that it will have gone for ever but that any kind of restraint on dividends simply means increased capital gains, scrip issues and extra dividends later? Therefore, it is simply a facade.

Mr. Healey

I hope very much that my hon. Friend is not suggesting that he will vote against the Government's proposals for renewing dividend controls later today. If so, I think that he will have some accounting to do to his supporters in his constituency.

As for the first part of my hon. Friend's question, my friends in the IMF—and I have many—are immensely impressed by the common sense of the British trade union movement in observing moderation and responsibility in pay claims over the past three years, whether or not they agreed with every detail in the Government's policy. I hope that my hon. Friend shares their views.

Sir G. Howe

Does the Chancellor recall saying in the early rounds of his correspondence with the managing director of the IMF that an essential element of his strategy was to secure a steady reduction over the next few years in the share of resources being taken by the public sector? Is he not this year actually increasing public spending by at least twice as much as the likely growth in the economy? Is not the right hon. Gentleman profoundly foolish so swiftly to have broken his undertaking to the IMF?

Mr. Healey

I discussed this matter with the IMF team when it visited this country a few months ago, and I was gratified to find that it totally supports the Government's policies on public expenditure, as on every other element of economic policy. I must ask the right hon. and learned Gentleman to read the remarks of his recent colleague, the hon. Member for Oswestry (Mr. Biffen). The right hon. and learned Gentleman cannot have it both ways. If he really thinks that we are following IMF policies, when the IMF endorses our policies he must support us.

Mr. Hoyle

Will my right hon. Friend please make clear to the IMF that it is not only that the TUC is against the 5 per cent. limit? It wants a return to free collective bargaining and it is against cash limits in the public sector, which have held down wages and salaries in the public sector. Is it not time that we changed our policy on this?

Mr. Healey

I do not think it is time we changed our policy on either of those matters. I think that the policies the Government have followed in these respects have contributed to the fall in inflation, on which the TUC no less than others in the country has congratulated us.