HC Deb 17 November 1955 vol 546 cc755-7
12. Mr. Grimond

asked the Chancellor of the Exchequer what new instructions he has sent in the last two or three months to the Capital Issues Committee.

Sir E. Boyle

None, Sir. But in the course of his Budget statement on 26th October my right hon. Friend informed the House that the Capital Issues Committee took note of his statement on 25th July on the need to check investment and has applied it in its scrutiny of applications. He added "I take this opportunity to underline with fresh emphasis what I then said, and to make it clear that there can be no question for the time being of the authorities relaxing their critical attitude."

Mr. Grimond

Would the hon. Gentleman not agree that as long as this Committee remains in being it should receive some definite directive from the Chancellor as to its part in the credit squeeze? Will he also say whether when local authority applications for loans are put on to the market their issues will have to go through the Capital Issues Committee?

Sir E. Boyle

There has been no fresh C.I.C. directive, because it would not have been appropriate to issue a fresh statement on investment priorities especially for the guidance of the C.I.C. Therefore, it was appropriate that the C.I.C. should be told in general terms to be more restrictive at the same time as the banks were told in general terms to reduce the level of advances.

Mr. Gaitskell

What priorities is the Capital Issues Committee to observe in this matter? Are there previous directives laying down which applications are to be given priority and which are to be put at the end of the queue?

Sir E. Boyle

There was some doubt as to how far the C.I.C. could go without asking for specific guidance, but I assure the right hon. Gentleman that in practice it manages to do its work without specific guidance by using its judgment on the merits of individual applications.

Mr. Gaitskell

How does it discriminate between applications, and if it does not, how does it cut down the amount of borrowing?

Sir E. Boyle

That is for the C.I.C. to say, but it has managed in practice to do its work by using its judgment in individual cases.

Viscount Hinchingbrooke

Since my hon. Friend has referred to a statement extant as to the investment priorities, would he look into the possibility of publishing a White Paper, at about the same time as the Economic Survey, on such investment priorities, including the operations of the Capital Issues Committee, so that the House can have some knowledge of what the priorities are and possibly debate the matter?

Sir E. Boyle

That raises wider issues, but I remind my noble Friend of what my right hon. Friend said in his statement on 25th July—that this policy was being left to the banks to pursue themselves.

Mr. Strachey

Does not the hon. Gentleman's answer mean that the Government have now abdicated any decision on what part of the investment programme is to go on and what is to be delegated into the hands of the Capital Issues Committee to which they give no guidance but, as the hon. Gentleman said, leave the matter entirely to the Committee's discretion?

Sir E. Boyle

I have said that the Committee has managed to do its work by using its judgment, and that, we believe, is much the more satisfactory solution.

Mr. Grimond

Have the local authorities to go through the Capital Issues Committee?

Sir E. Boyle

That is another question, but I have taken note of what the hon. Member has said.

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