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Volume 643: debated on Tuesday 4 July 1961

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asked the Chancellor of the Exchequer what assurances he gave to the European central banks and the American Federal Revenue Bank at their meeting in Basle at the beginning of June about reducing Government expenditure in return for sufficient funds to maintain the strength of sterling.

In spite of the very serious nature of the speech which the right hon. and learned Gentleman made to the chambers of commerce, and the warnings he gave about the grave state of our invisible earnings and visible earnings, is he assuring us that he can maintain the strength of sterling without any propping up from abroad?

I think that we can maintain the strength of sterling by the general efforts of the community as a whole.

Is the Chancellor suggesting that sterling is not being very much propped up from abroad at present by the holding of sterling by the European central banks? Although we all welcome this, is it not a fact that the present monthly gold figures are entirely unreal as long as an unknown amount is being held for the support of sterling?

I admit that they are not as precise as before, but what is happening is that some hot money which has been held on private account is now having substituted for it funds held by the central banks.