Bank Advances (Hansard, 20 January 1953)

§ 37. Mr. Nabarro
asked the Chancellor of the Exchequer whether he will make a statement upon the results achieved to date in respect of the policy of restricting loan facilities on personal and corporate accounts by the joint stock banks and other houses providing financial facilities; and what further special arrangements he proposes to make in this connection to assist and accelerate expansion of home food production.

§ Mr. R. A. Butler
The latest statistics of bank advances published by the British Bankers Association show that in the 12 months from November, 1951, to November, 1952, the total of advances fell from £2,016 million to £1,815 million, an overall reduction of about £200 million or 10 per cent., which is reflected in most of the individual categories, including personal and professional.
As regards bank credit for agricultural production, I would refer my hon. Friend to my reply to my hon. Friend the Member for Colchester (Mr. Alport) on 16th October.

§ Mr. Nabarro
Would my right hon. Friend not agree that since 16th October, renewed appeals have been made for increased farming output and that the greatest factor militating against that increased output is a shortage of capital? Will he, therefore, review this matter with the joint stock banks to ascertain whether any help can be given to farmers who genuinely wish to increase output?

§ Mr. Butler
I certainly agree that the problem of credit is vital to agricultural production and I am satisfied that the banks have this matter under review, but I certainly undertake to keep it under review myself.

§ Mr. Bevan
Is it not a fact that there has been a reduction of investment in agriculture over the past year—

§ Mr. Nabarro
No.

§ Mr. Bevan
—and is it not exceedingly undesirable, in view of our dependence upon overseas supplies of food, that a reduction in capital investment should take place in so vital an industry? What steps is the Chancellor taking to see that capital is attracted into agriculture?

§ Mr. Osborne
There has not been a reduction.

§ Mr. Butler
There are two matters which need to be considered. One is the question of investment in agriculture, the other is the provision of agricultural credit. I am satisfied that if the banks' figures were examined it would be seen that credit for agriculture has been very well maintained for a productive industry at a time when other productive industry has been restricted. With regard to investment in agriculture, there was a reduction of investment in the shortage of steel period, but I am satisfied that agricultural needs are so great that the point which the right hon. Gentleman puts is worthy of every attention. In fact, it has already had the attention of the Government.