§ 2.51 p.m.
§ LORD FRASER OF LONSDALEMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they will consider establishing forthwith a floating rate for the pound sterling in relation to other currencies.]
§ LORD FRASER OF LONSDALEMy Lords, may I ask the noble Earl whether Her Majesty's Government are fully aware of the enormous advantage of a free pound, which would of course vary from day to day by a penny or two instead of getting under pressure and eventually reaching a state of crisis?
EARL JELLICOEMy Lords, I would be the first to acknowledge that there are 594 many authorities—economic, academic and journalistic—who favour a floating rate. But I would remind the noble Lord that the present international system, which is embodied in the Articles of the International Monetary Fund, is based on stable parities; and in the view of Her Majesty's Government there would be severe disadvantages in seeking to break with that system.
§ LORD BYERSMy Lords, would it not be worth while giving further consideration to what is called the "crawling peg" system, to see whether this would help the sterling currency?
EARL JELLICOEMy Lords, that is a slightly different question. But as the noble Lord is doubtless aware, consideration is at present being given within the I.M.F. forum to making the present system work more effectively and more flexibly. What I would call the "crawling peg" family of proposals is under consideration in that forum, and certainly the mind of Her Majesty's Government is not closed to the possibility of improvement in the system.
§ LORD SHEPHERDMy Lords, I wonder whether the noble Earl can help the House, and particularly, I think, the noble Lord, Lord Conesford. What is a "crawling peg"?
EARL JELLICOEMy Lords, it is an extraordinarily complicated thing, and I think it would take me an undue amount of time to make it clear either to myself or to the noble Lord opposite.
§ LORD BYERSMy Lords, would it not be true to say that it is a system in which the exchange is allowed to float within very narrow brackets over a given period?