HC Deb 19 November 1940 vol 365 cc1830-1
56. Mr. Craven-Ellis

asked the Chancellor of the Exchequer whether the purpose of the present relatively high Bank Rate is to discourage commercial banks and the money market from going to the Bank of England for Treasury bill re-discounting facilities; has he considered the effect on the Treasury bill rate if the Bank Rate were fixed at 1 per cent.; and what are the advantages of the present high Bank Rate, which could be reduced at the discretion of the Treasury?

Sir K. Wood

I do not agree that the present Bank Rate is high. As I informed my hon. Friend on 18th June, decisions about the level of Bank Rate involve a number of different factors, apart from its effect on the Treasury bill rate, which can hardly be discussed within the limits of an answer to a Parliamentary Question. I would, however, refer my hon. Friend to the statement on the subject which was made during the Debate on the Second Reading of the Finance (No. 2) Bill on 6th August by my right hon. and gallant Friend the Financial Secretary to the Treasury.

Mr. Craven-Ellis

Does not the right hon. Gentleman consider that the Bank Rate is unreasonably high? Can I have a reply to the last part of the Question as to what are the advantages of the present high rate?

Sir K. Wood

I do not accept my hon. Friend's suggestion. I would, however, like him to look at the statement given by the Financial Secretary to the Treasury, which dealt with this point at considerable length.

Mr. Craven-Ellis

I know the statement to which the right hon. Gentleman refers, but I must ask him to let me—

Mr. Speaker

rose