HC Deb 12 July 1955 vol 543 cc1727-30
29. Mr. Roy Jenkins

asked the Chancellor of the Exchequer how far the latest available figures indicate that consumption is running in accordance with his Budget estimates.

Mr. R. A. Butler

There are as yet no estimates of consumers' expenditure beyond the first quarter of this year, so it is too early yet to judge what the trend since the Budget has been.

Mr. Jenkins

Does the right hon. Gentleman not recollect that he made an important speech to a trade gathering a few weeks ago, in which he seemed clearly to indicate that he was worried about the present level of consumption? Can he give us any indication whether he is contemplating further restrictive measures upon consumption?

Mr. Butler

I cannot add anything more to what I have said. Of course, there is a degree of internal demand which is very considerable at the present time and which is having its effect, as is obvious, upon our overseas payments, but I do not think that the estimate which I have given and the speech which I made in the House on 16th June can usefully be added to until I get the up-to-date figures. As I said on both the occasions to which I have referred, it is very difficult to give accurate information until one has the final figures.

Mr. Jenkins

Does the Chancellor feel that the February hire-purchase restrictions, in particular upon the furniture trade, have had the results he expected?

Mr. Butler

As I have indicated previously in the House and outside, in my view they are not having their effect upon the purchase of motor cars.

37. Mr. Jay

asked the Chancellor of the Exchequer what further proposals he has for restricting internal demand.

39. Mr. Gaitskell

asked the Chancellor of the Exchequer whether he will make a statement on the Government's monetary policy.

Mr. R. A. Butler

I have no reason to depart from the general assessment of the position which I gave to the House on 16th June. But I shall certainly take an opportunity of keeping the House informed from time to time in the usual manner.

Mr. Jay

Did not the Chancellor say in his speech to the N.P.A.C.I. on 1st July that credit control and other measures of restricting demand would have to be applied with courage? Can we know what these "other measures" are which the Chancellor intends to apply with courage?

Mr. Butler

I do not see anything but sense in the observations which the right hon. Gentleman has so kindly read to the House. If at any time there is any information to give to the House, I will give it. I am satisfied that our general assessment is correct and I am also satisfied that it takes time for credit policy to work through the economy. We must give that credit policy time, and we must hope that it will have effect, as I have every reason to think that it will.

Mr. Jay

The right hon. Gentleman says that he has other measures in mind which he proposes to apply. Is not the House entitled to know what they are?

Mr. Butler

One of the other measures to which I was referring was hire purchase, and another measure, not so much a Government measure, but another instance, is the effect of the price mechanism working through the economy in one or two respects which have been recently noticed.

Mr. Gaitskell

Is it the Government's intention that bank advances should be reduced? Did the right hon. Gentleman see the letter in "The Times" from the representatives of clearing banks, asking people to borrow less? Did it have his approval? If he wants bank advances to be reduced, in what way does he think that that should be done—by the banks rationing their customers or by raising the rate of interest still further?

Mr. Butler

The letter in "The Times" was written by the chairman and deputy-chairman of the clearing banks on their own responsibility. I took the opportunity, shortly afterwards, of welcoming the letter, because I thought that it showed their intention of operating the credit squeeze properly.

Moreover, in relation to the question of advances by the banks, one of the main difficulties is that the banks have been making advances to certain of the nationalised industries. It will now be seen that one nationalised industry has gone on the market. That will relieve the pressure on bank advances in due course. When the situation has righted itself, I hope that we shall see some adjustment in bank advances, so that eventually the situation will be more as we should like to see it.