HC Deb 29 June 1978 vol 952 cc1560-3
11. Mr. Higgins

asked Mr. Chancellor of the Exchequer when he expects agreement to be reached on the sixth review of International Monetary Fund quotas.

Mr. Healey

Increases under the sixth review were agreed in January 1976. I hope that it will be possible to make substantial progress on the seventh review at the next interim committee meeting in September.

Mr. Higgins

Does the Chancellor agree that an increase in quotas, as a method of increasing international liquidity, is preferable to an increase in the United States deficit? Will he say whether he will support proposals for a substitution account to deal with the dollar overhang?

Mr. Healey

I certainly agree that one of the most desirable ways of increasing international liquidity, and the lending capacity of the IMF, is an increase in quotas. As the hon. Gentleman knows, I supported the last one, and I shall support a substantial increase now. The IMF is now considering proposals for a limited substitution account which were made at the Mexico meeting, and I shall certainly support it.

Mr. Radice

While we are on the subject of the IMF, will my right hon. Friend take the opportunity of repudiating the serious charge of deceit made against him by the right hon. and learned Member for Surrey, East (Sir G. Howe) over the question of the standby of June 1976?

Mr. Healey

I am grateful to my hon. Friend for reminding me of that. Yes, I shall. I cannot accuse the right hon. and learned Gentleman of mendacity because parliamentary protocol would forbid it, but on that occasion he did show the familiar fogginess which he has on matters of fact. The day after the standby was negotiated, I told the right hon. and learned Gentleman that if any drawing on them could not otherwise be repaid on the due date, Her Majesty's Government would be prepared to seek further drawing from the International Monetary Fund."—[Official Report, 7th June 1976; Vol. 912, c. 915.] I also pointed out, in answer to a supplementary question from my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee), that there were no strings of any sort on domestic policy attached to this short-term facility. In view of the fact that what the right hon. and learned Gentleman said in the House on that occasion was totally untrue, I hope that he will take this opportunity of withdrawing his reckless and deceitful remarks.

Mr. Speaker

Mr. Peter Emery.

Sir G. Howe

rose—

Mr. Speaker

Order. I have called Mr. Peter Emery.

Mr. Emery

Returning to the original Question, in dealing with IMF borrowing, will the Chancellor tell the House what consideration has been given by the Government to the vast amount of United States paper which is being floated on the international market in order to cope with the imbalance of payments in the United States? Will he press the IMF and his European colleagues to make the American Government realise that if this continues it is bound to have an adverse effect on the investment and industrial expansion of the free world?

Mr. Healey

One of the most worrying features in recent years has been the enormous increase in volume of footloose funds in the Eurocurrency markets. One of the five points on which the Governments attending the Bonn Summit are hoping to reach agreement is a means of achieving greater stability in relation to currency. The point that the hon. Gentleman has made is at the centre of our preoccupations.

Sir G. Howe

The House will appreciate how sensitive the Chancellor is on these matters. Will he understand that on the occasion in question he told the House without qualification that there were no strings attached to the drawing which he was then making. Nevertheless, as subsequently appeared, he was bound to apply to the IMF, as he did. His statement stands on the record as one of deceit and not of candour with the House.

Mr. Healey

I hope that when I sit down, Mr. Speaker, you will ask the right hon. and learned Gentleman, if those are the right adjectives by which to describe him, to withdraw a remark which I have just proved to have been totally untrue. Using the same words as I used to my international colleagues on that occasion, I told the House something which the right hon. and learned Gentleman denied that I told the House. I made it absolutely clear in answer to my hon. Friend the Member for Birmingham, Handsworth that there were no strings in relation to domestic policy.

Mr. Lawson

You did not say anything about domestic policy.

Mr. Healey

I made it quite clear that we had agreed to go to the IMF for a further drawing. I shall read out exactly what I said: If any drawing on them —that is, the standby facilities— could not otherwise be repaid on the due date, Her Majesty's Government would be prepared to seek further drawing from the International Monetary Fund."—[Official Report, 7th June 1976; Vol. 912, c. 915.] In view of the fact that the right hon. and learned Gentleman has now been caught out in a deliberate lie—on the previous occasion he might have pleaded forgetfulness—I hope that you, Mr. Speaker, will ask him to withdraw his remarks.

Mr. Speaker

Order. Strange as it may sound to the House, I did not hear the Chancellor's last words. Perhaps wrongly, I was my self engaged in conversation. I want to tell the House that the word "deceit", like the word "mendacity"—[HON. MEMBERS: "Lie"]—We shall come to the word "lie". Everyone knows about that. The words "deceit" or "mendacity" applied to any right hon. or hon. Member are unparliamentary expressions. The word "lie" is most certainly an unparliamentary expression. Did the right hon. Gentleman use the word "lie"?

Mr. Healey

I am grateful for your guidance on this matter, Mr. Speaker. I certainly withdraw the word "lie", in view of what you have said. As the right hon. and learned Gentleman has now been caught out twice in making statements at variance with what he knows to be the facts, I hope that you will insist that he withdraws the word "deceit", which he has now used on two occasions.

Sir G. Howe

This exchange could go on for some time. I certainly withdraw the word "deceit", provided the Chancellor withdraws his earlier use of the word "mendacity", so that it can stand on the record.