HC Deb 18 June 1940 vol 362 cc28-9
58. Mr. Craven-Ellis

asked the Chancellor of the Exchequer what are the relevant considerations which prevent him giving direction, under Clause 2 of the recent Emergency Regulations, for taking immediate action for the reduction of the Bank Rate from 2 per cent. to 1 per cent., and the comparative reduction of rates of interest on Treasury bills and other forms of Government borrowing, bearing in mind that the Treasury bill rate is 100 per cent. higher to-day than it was in 1936–37, although the Bank Rate was at the same level as it is to-day?

Sir K. Wood

The level of Bank Rate affects a wide range of matters, including short term interest and deposit rates quite apart from the Treasury bill rate. Generally speaking, however, while it is the policy of the Government to secure that interest rates shall always be the lowest which circumstances at any given time permit, I have to hold a fair balance between the different factors involved.

Mr. Craven-Ellis

Was there not a fair balance between the Bank Rate and other rates of interest in 1936–37, and why should there be a variance now? Why should not the Chancellor exercise the powers which he has in this matter?

Sir K. Wood

I do not think it is possible to make a comparison between years so far apart.