International Monetary Fund

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 21st October 1969.

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Photo of Mr Neil Marten Mr Neil Marten , Banbury 12:00 am, 21st October 1969

asked the Chancellor of the Exchequer if he will make a statement on the latest visit to this country by members of the International Monetary Fund team.

Photo of Mr John Biffen Mr John Biffen , Oswestry

asked the Chancellor of the Exchequer what discussions he had with the members of the International Monetary Fund during their recent visit to London; and if he will make a statement.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

A team from the International Monetary Fund came to London in August. This was one of the regular consultations which under the arrangements already announced, precede each purchase on our current phased stand-by. The August consultation was related to the purchase we made in September. The talks were confidential, as is usual.

Photo of Mr Neil Marten Mr Neil Marten , Banbury

Does the Minister recall that in the report of the International Monetary Fund which came out after that visit on 23rd September Mr. Schweitzer said that Britain had to repay a large amount of debt in a short time, whereas the present Paymaster-General, speaking to the European Monetary Conference, said exactly the opposite, that we should have to fund a lot of our short-term debt into long-term debt. Which policy are the Government following?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

My right hon. Friend did not make a statement of policy and I am not aware of a report having been issued by Mr. Schweitzer.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Did the Government discuss with the I.M.F. the virtues of a floating exchange rate for sterling, or did they follow the precept that the inevitable is undiscussable until it has actually happened?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The hon. Gentleman knows that these discussions are confidential.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Is it a fact that money supply is being restricted at a rather greater rate than was originally forecast to the I.M.F.? If so, by how much is it intended to improve the situation and in what way? Now that the balance of payment figures are so much better, is it not time to get away from the neurosis about them and to publish trade figures quarterly instead of monthly?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The last is an interesting but separate question. On the former question, the course of domestic credit expansion, to which I imagine my hon. Friend is referring, is satisfactory and compatible with our economic objectives and policies.

Photo of Mr Peter Hordern Mr Peter Hordern , Horsham

The right hon. Gentleman said that he had no news or knowledge of the report given by Mr. Schweitzer. But in a report in The Times newspaper on 24th September Mr. Schweitzer is reported as saying that In his report released today"—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. No quotations are permitted in a supplementary question.

Photo of Mr Peter Hordern Mr Peter Hordern , Horsham

—that Britain will be compelled by short-term debts to adopt more severe domestic conditions. Are the comments made by the Paymaster-General about rephasing our international obligation in line with our obligations to the International Monetary Fund as our creditors see them, or not?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The trouble is that the hon. Gentleman has no accurate knowledge of the comments made by my right hon. Friend.

Photo of Mr Robert Sheldon Mr Robert Sheldon , Ashton-under-Lyne

Can my right hon. Friend confirm that the precise amount of domestic credit expansion accepted in the Letter of Intent remains the policy of Her Majesty's Government? Is it not time to accept that precise figures cannot be quantified in the way in which was then thought possible, and that further figures suggest that there is little relationship of the kind mentioned between domestic credit expansion and the growth of the gross national product?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The formula there used is an aid to understanding one aspect of economic development. No one suggests that it is the whole story. It is a valuable assistance to understanding economic development in one aspect.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

asked the Chancellor of the Exchequer when he now expects to make a start on the fulfilment of undertakings given in his predecessor's letter of intent to the International Monetary Fund regarding the liberalisation of controls on capital movements.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

My right hon. Friend has no present proposals for changes in this field.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

Can the Chief Secretary say whether the Chancellor of the Exchequer regards the specific undertaking given in paragraph 13 of his predecessor's Letter of Intent to the I.M.F. as binding upon him? If he does, does not that mean that the liberalisation of capital transactions is a prior responsibility on any accumulated funds which may now come into the balance of payments?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The answer to the first question is "Yes", to the second one, "No".