Quotas (Hansard, 19 October 1989)

9. Mr. Alan Williams
To ask the Chancellor of the Exchequer what is the Government's response to the International Monetary Fund's proposals by Mr. Michael Camdessus for a quota increase.

§ Mr. Lawson
As I said at the International Monetary Fund and World Bank's annual meetings in Washington, the case for a substantial quota increase has not been made, and the Government believe that a moderate increase in quotas is all that is needed.

Mr. Williams
Does the Chancellor recognise that since the last quota increase the growth in the world economy and the emergence of the international debt problem on their own justify a larger rate of increase than the Government are willing to support? Does he accept that historically important changes are taking place in eastern Europe, the success of which will depend on the economic progress of the countries concerned? Would it not be tragic if this unique opportunity, from which we have so much to gain in the West, were missed because we starved the IMF of the resources that it needs to play a constructive role?

§ Mr. Lawson
I can assure the right hon. Member that this historic opportunity, as he rightly calls it, will not be missed and the IMF will not be starved of the resources that it needs. The question is what does it need. The plain fact of the matter is that the IMF's liquidity today, before any quota increase, is larger than it was after the last quota increase, which my right hon. and learned Friend the Leader of the House played a large part in securing. But it is larger today before any further quota increase than it was immediately after the last quota increase, which itself was to some extent a response to the debt crisis which began with Mexico in 1982.

§ Sir William Clark
Is it not hypocritical for Labour Members to ask the Government to increase the quota to the IMF because, when they were in Government, they were taking money from the IMF? Is it not proof positive that the economy is sound that we can now consider increasing our quotas to the IMF when, under Labour, that would not happen?

§ Mr. Lawson
My hon. Friend makes a good point. As I said earlier, we contributed fully to the last quota increase, in 1983. and we shall contribute to the next quota increase whatever that may be. However, we shall not go cap in hand as beggars to the IMF, as the last Labour Government did in 1976.