HC Deb 29 October 1980 vol 991 cc300-1W
Mr. Hooley

asked the Chancellor of the Exchequer what are the views of Her Majesty's Government about the appropriate size of an International Monetary Fund substitution account and how these views agree with those held by Germany, France, Japan and the United States of America.

Mr. Lawson

There is a general provisional agreement that the account should become effective when the fund is satisfied that there is a level of participation which is both widespread in terms of numbers of countries willing to make deposits in the account, and substantial in terms of the aggregate amount to be deposited. What is appropriate in terms of the size of the account will therefore depend to a considerable extent upon the number of countries involved.

Mr. Hooley

asked the Chancellor of the Exchequer what are the views of Her Majesty's Government about provisions for covering any running or capital losses on the proposed International Monetary Fund substitution account.

Mr. Lawson

Her Majesty's Government recognise that these provisions will need to be the subject of further detailed negotiation. We are prepared to consider the earmarking of part of the IMF's holdings of gold to cover any capital deficiencies, but do not rule out other approaches.

As regards interest shortfalls on the account, we are looking for arrangements which are both equitable and durable. In both cases the scale of the United States contribution will be a critical element.

Mr. Hooley

asked the Chancellor of the Exchequer what is the policy of Her Majesty's Government on the granting of observer status at the International Monetary Fund to the Palestine Liberation Organisation.

Mr. Lawson

As the United Kingdom's governor of the International Monetary Fund, my right hon. and learned Friend the Chancellor of the Exchequer joined the governors of other EEC member States in supporting a resolution which provided for the whole question of the attendance of observers at the annual meetings to be further studied. The resolution, which limited observers at the 1980 annual meetings to those who had attended in 1979, meant that the PLO could not attend. The resolution secured the necessary majority of votes and the necessary quorum.