HC Deb 03 February 1955 vol 536 cc1268-9
50. Mr. Grimond

asked the Chancellor of the Exchequer his current advice to the banks on the provision of credit for hire purchase.

Mr. R. Maudling

My right hon. Friend has not modified the request that the banks, when considering applications for advances to finance hire-purchase business, should apply principles similar to the guidance given in his letter of 19th August, 1954, to the Chairman of the Capital Issues Committee. The text of that letter was published at that time, but with permission I will circulate it in the OFFICIAL REPORT.

Mr. Grimond

Is it not the case that there has been a very considerable extension of hire-purchase credit, and is the Chancellor satisfied that this is in the best interests of the economy?

Mr. Maudling

There has certainly been an extension, which, of course, has led to increased production and increased consumption, and that is not by any means altogether a bad thing. In the matter of guidance to the Capital Issues Committee, my right hon. Friend asked it to deal with applications on their merits, bearing in mind that an increase in the volume of hire-purchase finance leading to excessive expansion of consumer credit would not be in the national interest. It is a matter of judgment.

Mr. Gaitskell

Can the Economic Secretary say by how much credit for hire purchase has increased since August?

Mr. Maudling

Not without notice.

Following is the letter:

Treasury Chambers,

Great George Street, S.W.1.

19th August, 1954.


As you are aware, the announcement on 13th July, 1954 of the removal of restrictions on the terms of hire purchase and credit sale agreements was accompanied by a statement that there was no change in the general limitation of finance for hire purchase.

I do not think that in present circumstances it would be appropriate to operate this limitation by imposing a rigid ban on all new finance for hire purchase. But I ask the Capital Issues Committee to continue to deal with hire purchase applications on their merits, having regard to the purposes for which the money is being raised, and bearing in mind the general consideration that an increase in the volume of hire purchase finance leading to an excessive expansion of consumer credit would not be in the national interest.

Yours very sincerely,


The Lord Kennet, G.B.E., D.S.O., D.S.C.

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