HC Deb 06 November 1980 vol 991 cc1455-6
16. Mr. Knox

asked the Chancellor of Exchequer when he expects that the United Kingdom will take part in the exchange rate mechanism of the European monetary system.

Mr. Lawson

I have nothing to add to the reply that my right hon. and learned Friend the Chancellor gave my hon. Friend on 24th July.

Mr. Knox

Does my hon. Friend agree that, if Britain were to be a full member of the EMS, it would provide more stable conditions for those engaged in trade with our EEC partners to operate, which would be beneficial to this country? Is it not time that we seriously considered becoming a full member?

Mr. Lawson

In the present conditions of the foreign exchange market and the factors affecting sterling, it would be wholly unrealistic for sterling to be a member of the European monetary system. Indeed, if we had been in the EMS, it would have disrupted our monetary policy or the alignment of exchange rates within the system or, more probably, both.

Mr. Denzil Davies

Does the Financial Secretary agree that the only sensible economic decision that this Government has taken in the past 18 months has been not to join the EMS? Does he further agree that, with the total collapse of the Government's economy policy, that decision is beginning to look like a shining beacon in a sea of darkness?

Mr. Lawson

I am glad that the right hon. Gentleman agrees that that is a sensible decision, but the list of other sensible decisions taken by this Government is so long that I do not have time to read it to the House this afternoon.

Mr. David Steel

If the Financial Secretary is claiming that joining the EMS would interfere with both the monetary policy and the exchange rate policy of this Government, is not that a further reason for considering joining?

Mr. Lawson

No, Sir. It is a reason for not joining.

Sir Frederick Burden

Does my hon. Friend consider that the economic policy of the Labour Government was successful when unemployment doubled and in 1975–76 they even went to the extent of cancelling the Christmas bonus for old age pensioners?

Mr. Lawson

My hon. Friend is, of course, right. Bearing in mind their record when in office, the attitude taken by the Opposition is a mixture of hypocrisy and cynicism.

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