HC Deb 02 February 1956 vol 548 cc1075-6
41. Mr. Lee

asked the Chancellor of the Exchequer whether he is aware of the growing fears that a continuation of the credit squeeze may precipitate an industrial slump; and what action he proposes to take to restore confidence to industry.

Sir E. Boyle

As my right hon. Friend said, on 24th January, in reply to the hon. Member for Oldbury and Halesowen (Mr. Moyle), we shall continue to press forward with the policy of restraining inflation. The restriction of credit is an essential part of that policy and must therefore continue.

Mr. Lee

How do we judge of the success of this policy? Is it to be the number of bankruptcies among small firms or the number of employees who are on short time or unemployed? Is the hon. Gentleman aware that the trade unions are getting very apprehensive indeed of the results of this policy?

Sir E. Boyle

The hon. Member is, I am sure, aware that it is sheer nonsense for anyone to suggest that we are now on the edge of an industrial slump. The problem is still that of restraining inflation, as he himself will be well aware.

Mr. H. Wilson

Is the Economic Secretary aware that the credit squeeze has worked in a way which leaves the big industrial giants almost untouched in their economic policies and is having the gravest effect on a lot of small men and businesses throughout the country? Since the hon. Gentleman says that the problem facing us is still one of inflation, will he now recognise, as is widely accepted, that the credit squeeze is not solving the problem? Will he confirm or deny that the Government have now decided to introduce a measure of physical control?

Sir E. Boyle

In my Answer, I was careful to say that the restriction of credit is an essential part of the policy of restraining inflation. I do not unsay one word of what I said last year in defence of the autumn Budget.

Mr. H. Wilson

In view of all the uncertainty on this question and its vital importance, will not the hon. Gentleman answer the question put to him about physical controls? If the credit squeeze is part of the policy, will he say whether physical controls—for instance, on building licensing—are also part of the Government's policy?

Sir E. Boyle

As the right hon. Gentleman knows very well, that question is quite different from the one on the Order Paper.