§ 1. Mr. Knoxasked the Minister for Trade how many individuals and how many organisations have made representations to him in favour of floating exchange rates in the past 12 months.
§ The Minister for Trade (Mr. Peter Rees)I have received no formal representations during the last year in support of floating exchange rates.
§ Mr. KnoxDoes my hon. and learned Friend agree that international trade was facilitated and that the British economy worked better with fixed exchange rates? What steps are the Government taking to try to bring about greater order in international exchange rates?
§ Mr. ReesIt is true that Bretton Woods made its contribution to the expansion of trade in the world in the post-war period. We have, however, moved slightly out of that period. I recognise that the EMS has contributed to the stability of exchange rates and has therefore assisted trade within the membership of that mechanism. The Government will, as they have announced, consider joining the EMS at the appropriate moment.
Mr. J. Enoch PowellDo not recent events demonstrate the wisdom of Her Majesty's Government in staying well clear of the European monetary system?
§ Mr. ReesI do not agree with the right hon. Gentleman's conclusion. It is not that the EMS is fundamentally unsound—
§ Mr. Rees—but that the Socialist, monetary and fiscal policies in certain countries will create abnormal exchange rate instability.
§ Mr. MarlowIs it possible to have an operative European monetary system if different countries within the European Community follow radically different economic policies?
§ Mr. ReesMy hon. Friend will have heard me say that one country at least has been following policies that have created monetary and fiscal instability.