§ 31. Sir W. Smithersasked the Chancellor of the Exchequer, in view of the fact that currency circulation was£549 million in 1935,£1,628 million in 1951 and£1,891 million in April, 1954, what steps he is taking to arrest this form of inflation.
§ The Chancellor of the Exchequer (Mr. R. A. Butler)I cannot agree that an increase in the currency circulation is necessarily a form of inflation. It is, however, the constant aim of this Government to check inflation and to keep prices stable.
§ Sir W. SmithersIs not the only answer to this question to reduce taxation, to reduce national and local government expenditure and to resist increases in 223 wages, which, unless there is an increase in production, must go down and down in purchasing power?
§ Mr. ButlerI am fully aware—indeed, I have reduced taxation during my period of office—of the need to reduce local and national expenditure—
§ Sir W. SmithersThen mind you do it.
§ Mr. Butler—and I am also aware that the best answer to the Question of the hon. Member is the one which I gave.
Mr. Norman SmithIs the Chancellor aware that during the same period there has been an almost identical proportional increase in the amount of bank deposits, and that whereas bank deposits entail public debt to private persons, currency inflation does not?
§ Mr. ButlerI am very much obliged to the hon. Member for his disquisition on economics.
§ Mr. AsshetonWould my right hon. Friend agree that the recent increases in the fiduciary issue gives a certain amount of anxiety to those, who, like the Chancellor, wish to see the cost of living reduced?
§ Mr. ButlerThey may give anxiety, but technically these increases in the circulation over the years referred to certainly have some relation to past inflation. I would not say that the figures as at present evidenced are any evidence of present inflation.