HC Deb 10 July 1997 vol 297 cc1066-7
13. Mr. Barry Jones

To ask the Chancellor of the Exchequer if he will make a statement on the current strength of the pound. [6191]

Mrs. Liddell

The Chancellor keeps a close watch on the strength of the pound and is conscious of its impact on companies that are heavily involved in exports.

Mr. Jones

Does my hon. Friend know of the British steel industry's difficulties with the export of its products? In particular, is she aware of the anxieties of Shotton steelworkers in my constituency which are felt because of difficulties in exporting their products as a result of the high value of the pound? Does she agree that the Conservative party has to face up to a large measure of guilt for that?

Mrs. Liddell

I congratulate my hon. Friend on the concern that he has consistently expressed for the steel industry in his constituency. I am aware that, because of an efficiency drive by the company that runs Shotton, there have been 69 redundancies. We are acutely conscious of the impact of the previous Government's failure to act on the strength of the pound and we are conscious of its impact on exports. Indeed, my hon. Friend the Paymaster General is to chair a special forum devoted to exports. I am sure that he will concentrate on those aspects of the export industry that directly relate to the steel industry.

Sir Peter Tapsell

If the hon. Lady and her colleagues on the Treasury Bench are so proud of the fact that the Bank of England, on their behalf, is tightening monetary policy, how does she intend to face up to the real dilemma that every time interest rates go up not only will the pound sterling strengthen still further but mortgage rates will also go up, with the result that the cost of living index will go up? Surely that real problem will require fiscal approaches.

Mrs. Liddell

The hon. Gentleman rehearses the very argument that got us into difficulties in the 1980s and the Government he supported knew all about that. Before I came into the Chamber today I learnt that the pound has fallen by 2 pfennigs.

I take the hon. Gentleman's point about monetary policy. In that respect, it is important that we have a coherent long-term policy on interest rates. That is why the Chancellor has taken the sensible decision to ensure that the Monetary Policy Committee should take decisions on interest rates independent of the political grandstanding that took place under the previous Government. That affects mortgage rates, which affects the well-being of families throughout the country.

Mr. Geraint Davies

Is not today's failure by the shadow Chancellor to say whether he agrees with the announced interest rate increase a clear signal that the Conservatives can never be trusted again not to lead us into a boom-bust cycle?

Mrs. Liddell

My hon. Friend is perfectly correct. The shadow Chancellor is frightened to say yea or nay because he is frightened about which part of the Conservative parry he might have to play to for his further preferment.