HL Deb 25 October 1983 vol 444 c131

2.53 p.m.

Lord Ezra

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

The Question was as follows:

To ask Her Majesty's Government how real interest rates in this country compare with those in other countries within the European Community.

The Chancellor of the Duchy of Lancaster (Lord Cockfield)

My Lords, there are difficulties of calculation but, broadly, real short-time interest rates in the United Kingdom do not appear to be out of line with those in other countries of the European Community.

Lord Ezra

My Lords, I am grateful for that Answer. Will the noble Lord not agree that, generally speaking, interest rates within Britain and the Community are still too high to facilitate the recovery of industry for which we are all waiting? Does he not think that it would be a desirable initiative for Her Majesty's Government to try to lead the Community in bringing down interest rates and thus have an impact on countries outside the Community which may have higher rates?

Lord Cockfield

My Lords, I agree entirely with the first part of the noble Lord's supplementary question. The best way of bringing down interest rates is to follow a responsible financial and monetary policy. This is what this country is doing, as are other countries; for example, Western Germany.

Lord Bruce of Donington

My Lords, will the noble Lord confirm that, after a lapse of four years, Her Majesty's Government are rapidly coming to the conclusion that there is a relationship between interest rates and the exchange rate?

Lord Cockfield

My Lords, these are complex matters. There is a most important relationship between the level of the Government's borrowing requirement and interest rates. That is a matter to which the Government's policies are directed. I am only too glad to have the noble Lord's support for those policies.