HC Deb 28 February 1991 vol 186 cc1101-2
3. Mr. Campbell-Savours

To ask the Chancellor of the Exchequer what representations he has received on the level of interest rates and the value of the pound from Mr. Timothy Congdon over the last few weeks.

The Chancellor of the Exchequer (Mr. Norman Lamont)

None, Sir.

Mr. Campbell-Savours

Is not the leaking of information about Government policy by a Bank of England official to a bank in the City an offence and should not the use of such information by a bank become an offence under insider trading legislation?

Mr. Lamont

I should like to consider the hon. Gentleman's last point. The answer to his first point is, obviously, yes. However, I am afraid that I can give the hon. Gentleman no further answer in addition to what I have already told him in a written answer. If the hon. Gentleman has any evidence or information that he wishes to place before me or the relevant authorities, I am sure that he will do so——

Mr. Campbell-Savours

I am asking about the law.

Mr. Lamont

I have answered the hon. Gentleman's specific question.

Sir Peter Hordern

Why should my right hon. Friend pay any more attention to Mr. Timothy Congdon's views than to those of the 364 economists who wrote a letter to The Times in 1981 and got it wrong then?

Mr. Lamont

I hesitate to divulge it to my hon. Friend, but some of the Liverpool six are quite well known to me. I have had discussions with some of them from time to time. They may not be family friends, but I know that they are not always correct.

Mr. Beith

Has the Chancellor noticed the strange alliance between the Liverpool six, the family friends, some of his own Back-Benchers and members of the Labour party in support of the proposition that it does not matter if a substantial cut in interest rates is followed by a devaluation? Does he agree that the last thing that this country needs is a reputation for devaluing its way out of trouble and that what is really needed is an anti-inflationary policy that would provide the credibility that would make interest rate cuts possible?

Mr. Lamont

I agree with the hon. Gentleman. It is no answer to the problem of inflation or interest rates to say that we must devalue the currency to equate with our costs. The real answer is to make our costs equate with the currency and that is what we are doing.

Mr. Ian Stewart

I congratulate my right hon. Friend on the way in which he has absolutely refused to entertain any devaluation of the pound now that it has joined the exchange rate mechanism. Does he agree that even to entertain such a move would undermine the framework of the anti-inflationary policy that he has adopted and that, over time, it would make it more difficult to bring about the necessary reductions in interest rates than would adhering to the framework of the ERM?

Mr. Lamont

I agree entirely with my right hon. Friend. I have set out our precise policy on interest rates to the House on several occasions. I am not going to take any risks with either interest rates or inflation, which must remain the main objective of our policy. We have too high a rate of inflation vis-à-vis our European competitors and I am determined that we should get it down, and quickly. I hope that my hon. Friends will not have exaggerated ideas about interest rates that may or may not be possible.

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