HL Deb 06 December 1967 vol 287 cc666-7

2.32 p.m.

LORD GRANTCHESTER

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what is the cost of meeting their short-term liabilities by making interim payments in sterling (which carry interest, when deposited in London), as compared with final settlements in gold; and whether the cost that falls upon various Commonwealth countries from the retention of the present price of gold has been discussed with them and estimated.]

LORD BESWICK

My Lords, in present circumstances it is not considered better to meet our liabilities from our limited gold reserves rather than by making use, as necessary, of the short-term credit facilities available to us. As the House knows, it is not the practice to give details of the use of such facilities, and I cannot therefore give an estimate of the interest cost involved.

LORD GRANTCHESTER

My Lords, is it not correct that we have something like £5,000 million of short-term liabilities, and that the cost, placed on deposit in London, is something like £250 million a year to the deficit of our balance of payments? Would not the noble Lord agree that such a system needs reviewing or consideration?

LORD BESWICK

My Lords, if the noble Lord is saying that the present system in international monetary arrangements is less than perfect, I agree with him that this is so. The difficulty is in getting international agreement on a more rational system.

LORD FRASER OF LONSDALE

My Lords, while there may be reasons of State for reticence about certain transactions or arrangements, there cannot be any reticence, surely, about the last part of my noble friend's question. Have the Commonwealth been consulted?

LORD BESWICK

Yes, my Lords. Once a year we have a Commonwealth Finance Minister's Meeting and these matters are fully considered.