HC Deb 20 April 1937 vol 322 cc1583-4
49. Major Stourton

asked the Chancellor of the Exchequer whether he is aware that the present cheap rates for money are increasing the price of materials and adding to the cost of rearmament; and whether, in order that the general taxpayer may not suffer on balance, he will re-examine the effects of artificially cheap money causing a rise in the commodity index number?

Lieut.-Colonel Colville

I would refer my hon. and gallant Friend to the reply which I gave to the hon. Member for Evesham (Mr. De la Bère) on 12th April.

Mr. Boothby

Is it not a fact that, if the depreciation of currencies is taken into account, the present commodity price level is nearly 50 per cent. below that of 1927?

50. Major Stourton

asked the Chancellor of the Exchequer whether, in view of the fact that the wholesale commodity sterling price index is to-day 7 per cent. higher than the index for the whole period 1844 to 1913, he will take precautionary steps to ward off a repetition of the calamities which have hitherto followed high commodity prices causing over-production and diminished consumption owing to the reduced real purchasing power of wages, salaries, and fixed incomes?

Lieut.-Colonel Colville

My right hon. Friend has the situation constantly under observation, but he is unable to agree with the interpretation of price movements suggested in my hon. and gallant Friend's question. He does not think that increased production involving increased employment and so increased demand can be regarded as undesirable at the present time.

Major Stourton

Is my right hon. and gallant Friend aware that the principal cause of the rise in commodity prices is speculation due to cheap money?

51. Sir Nicholas Grattan-Doyle

asked the Chancellor of the Exchequer whether it is still the policy of the Government to welcome a rise in the staple commodity price level; and, if so, will he state by how much, approximately, beyond the present average index number?

Lieut.-Colonel Colville

I would refer my hon. Friend to the Declaration by the Delegations of the British Commonwealth, July, 1933 (Command Paper 4403) where he will find the various considerations set out more fully than is possible in reply to a Parliamentary question. As there indicated it is not possible to state in precise terms an ultimate level of prices to be aimed at.

Sir N. Grattan-Doyle

If I repeat this question later, will my right hon. and gallant Friend give me a more definite answer?

Lieut.-Colonel Colville

I cannot make any promise. Perhaps my hon. Friend will read the declaration to which I have referred. It sets out at some length the view of the British Delegation, from which His Majesty's Government have not departed.