§ 3.56 p.m.
§ LORD SHEPHERDMy Lords, I think that it may be convenient if I were now to repeat a Statement which has just been made by my right honourable friend the Chancellor of the Exchequer in another place. I will use his own words:
"With your permission, Mr. Speaker, I should like to make a Statement about my visits to Canada and the United States. Both these visits had as their aims the exchange of views and information with my opposite numbers in the two countries, and in particular to see what common ground exists, or can be developed, for achieving progress on the vital question of international liquidity.
"In Ottawa, I had very useful talks with Mr. Walter Gordon, Canadian Minister of Finance, and some of his colleagues.
"In Washington, I met the recently appointed Secretary to the U.S. Treasury, Mr. Henry H. Fowler, and several other U.S. Ministers. In addition, I had conversations with the President and Vice-President. With permission, I will circulate in the OFFICIAL REPORT the text of the Communiqué issued in Washington on 30th June.
"On the particular issue of international liquidity, Her Majesty's Government regard as urgent the problem of devising appropriate arrangements which might be used for the creation of additional liquidity. In this connection, I would remind the House that there is an expectation that the growth of world trade will slow down over the next year. We must try to ensure that our problems are not made more difficult by deficiencies in international monetary arrangements. Some progress has, of course, already been made. As the House knows, if the recommendations recently made by the International Monetary Fund are fully implemented 1096 the total of Fund quotas will be increased from about 16 billion dollars to 21 billion dollars.
"I am under no illusions about the serious difficulties in the way of making further progress, which can only come by agreement. At present the nations hold many differing views. There are those who believe that the present scale of international liquidity is in itself sufficient, but that the system is being misused by countries in balance-of-payments deficit; while there are others who believe that there is currently a shortage of liquidity and that immediate action should be taken to create more.
"Following from this, nations are not yet in agreement about the priority of the tasks which need to be undertaken. One view, for example, is that the first requirement is to put in hand a fundamental reconstruction of the international monetary system, in the belief that once this has taken place the supply of liquidity will be brought under more conscious control than hitherto. Another view is that comparatively small adjustments in the functioning of the system would be sufficient.
"My talks with the United States authorities show that they are actively considering these problems and are proceeding—as we are—with a sense of urgency. I see the role of Her Majesty's Government as one requiring continued persistence and flexibility. I should myself prefer to reach a solution which is built upon, or is closely linked with, the International Monetary Fund, since this institution has great capacity for expansion and development, and has served the world well during the last twenty years.
"I therefore propose to continue my discussions with the French Finance Minister and with the Secretary of the U.S. Treasury. I also hope to have talks with other Finance Ministers, in an endeavour to secure a solution which will contribute to the growth of world trade and thus assist both the industrialised countries, and also the developing nations.
"The talks in Washington showed that both Governments are agreed that the pound and the dollar will continue to play an essential role as reserve 1097 currencies; that there is an identity of interests between them; and that both Governments must, and will, maintain and intensify the measures of financial co-operation which already exist."
That is the end of the Statement.
§ Following is the communiqué referred to :