HL Deb 25 July 1967 vol 285 cc686-7

2.48 p.m.

LORD FRASER OF LONSDALE

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 whether Her Majesty's Government have any statement to make as to their attitude towards the provision of increased liquidity by the creation of new paper credits or by raising or freeing the price of gold, or both.]

LORD SHEPHERD

My Lords, Her Majesty's Government have for long been working for international agreement on a contingency plan to create a new form of reserve asset to supplement gold and reserve currencies as and when the need arises; and there is a fair prospect that agreement on the outline of such a plan will be reached by the time of the September meeting of the I.M.F. The Government are opposed to raising or freeing the price of gold.

LORD FRASER OF LONSDALE

My Lords, will the noble Lord and Her Majesty's Government bear in mind, if it proves difficult to find a paper solution, that most of the world thinks that there is nothing so good as gold?

LORD SHEPHERD

My Lords, I hesitate to differ from the noble Lord, but I think he will agree at least the vast majority of monetary Powers are opposed to an increase in the price of gold.

THE EARL OF DUNDEE

My Lords, while we all hope that something on the lines mentioned by the noble Lord in his answer may happen in September, could not the Government say a little more loudly and clearly to our colleagues in O.E.C.D. that the steps which have been taken since the Tokyo Agreement are hopelessly inadequate and that the shortsightedness of bankers and finance Minister in France, Germany, Switzerland and other countrites is mainly responsible for the present economic slow-down in Western Europe?

LORD SHEPHERD

My Lords, this is a highly technical matter, as I am sure the noble Earl, Lord Dundee, would agree, and to speak loud and clear would not help us. What we must do is to negotiate in the first instance within the Council of Ten, and I repeat, as I said in my original Answer, we are very hopeful of achieving a solution to this very important but difficult problem.

LORD PARGITER

My Lords, would not by noble friend agree that in any circumstances of expanding trade gold is most unlikely to be a suitable means for this purpose, and therefore an alternative means must be found?

LORD SHEPHERD

My Lords, I think the truth is that gold has proved its worth, but it is quite clear that with the expansion of world trade we must seek some commodity, some currency which is not tied to some metal, or some artificial means of assessing the assets. If we could find some drawing rights rather similar to what we have in the I.M.F., we hope this would provide us with the right solution.