§ 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 with reference to the Answer given by the noble Earl, Lord Jellicoe, on July 15, last, about a floating rate for the pound, whether the further consideration—which he then foreshadowed —has been given to " making the present system work more effectively and more flexibly "; and, if so, with what result.]
THE LORD PRIVY SEAL (EARL JELLICOE)Yes, my Lords. The International Monetary Fund produced a major report on the present exchange rate system last autumn. This concluded that the fundamental principles of the Bretton Woods system, based on fixed but adjustable parities, were still sound. At the annual meeting of the I.M.F. in September this conclusion was endorsed by Governments, who also agreed that three possible minor modifications in the direction of greater flexibility, identified in the report, might usefully be further studied. These further studies have yet to be completed.
§ LORD FRASER OF LONSDALEMy Lords, will my noble friend represent to the Chancellor of the Exchequer that it is desirable to make the pound more flexible or even free, and that there could not be a better time than now when the situation is " bullish "?
EARL JELLICOEMy Lords, I will of course convey to my right honourable friend the feelings which my noble friend has expressed. But doubtless my noble friend will have seen the views expressed 208 by the Chancellor in another place on May 11.
§ LORD GLADWYNMy Lords, does the noble Earl agree that if the Government now came out in favour of a floating pound, it would hardly be likely to appeal to M. Pompidou?
§ LORD HANKEYMy Lords, will the Government consider whether it might be better to see what happens to the mark before we try the same experiment with the pound?
EARL JELLICOEMy Lords, may I expand on the perhaps rather sibylline reply that I gave to my noble friend, for those who do not follow these matters in another place with the close attention of some of us? I must explain that my right honourable friend the Chancellor of the Exchequer made it perfectly plain in another place on May 11 that Her Majesty's Government were opposed to a general system of floating rates. I should make it clear that the views which he expressed at the I.M.F. annual meeting in Copenhagen, which were along the same lines, were shared by other Governments.
§ LORD FRASER OF LONSDALEBut, my Lords, does that necessarily mean that he is right or, indeed, that he has proved to be right these last 10 years?
EARL JELLICOEMy Lords, I would not claim infallibility even for myself, let alone for somebody else. But I think it is a fair presumption that he may be right.