It is customary to use the Adjournment debate to reflect upon matters of political immediacy, even though one realises that the Government cannot give an authoritative answer at the conclusion of the debate. I hope that my right hon. Friend the Leader of the House will convey to the Treasury, with Christmas good will, the hope that it will reflect seriously on points that are of considerable and growing moment. I refer to the deepening recession that is evident now throughout the economy and which, in my judgment, has been made that much worse by the inflexibility of a fixed exchange rate system that inhibits an interest rate policy.
A modest roll call of honour accounts for about a dozen Tory Back Benchers who were not seduced by the arguments for membership of the exchange rate mechanism. They represent an unrepentant set of Davids against the Goliaths of the Confederation of British Industry, the City and the occupants of the Treasury Bench, but I do not believe that the Goliaths won the argument in the recent developments.
The debate was conditioned by the belief that membership of the exchange rate mechanism would confer great benefits. With the strength of continental currencies, it was believed that we could go for lower interest rates without prejudicing the parity of sterling, because it would receive support from our neighbours and friends. That view was reinforced by the gesture of British membership, which was accompanied by a 1 per cent. cut in interest rates. Whatever expectations were encouraged during those early hours have not been fulfilled since.