HC Deb 14 February 1956 vol 548 cc2160-2
33. Mr. Lee

asked the Chancellor of the Exchequer how far his instructions to the banks enable them to accept unemployment or short-time working in a given industry as a sufficient reason for relaxing existing credit restrictions in its favour.

Sir E. Boyle

No instructions have been given to the banks how to reduce their outstanding advances. This has been left to their discretion.

Mr. Lee

Is it the policy of the Government that an industry the products of which play an important part in our exports is to be permitted to languish, and to have unemployment and short-time working, at the same time as the import-export gap is widening month by month? Will the right hon. Gentleman ensure that priority is given to an industry which can help the export market?

Sir E. Boyle

The hon. Gentleman will remember that my right hon. Friend the former Chancellor of the Exchequer specifically mentioned in his statement last July the great importance of increased production in exports, and drew the attention of the banks to this.

Mr. Chapman

Has the attention of the Economic Secretary been drawn to the statements of the chairmen of the banks, who, in chorus, have said how much they hate doing the Government's dirty work for them?

Sir E. Boyle

I have read all the statements of the chairmen of the banks.

Mr. Stokes

Is it not a fact that not less that 80,000 of our manufacturing units employ fewer than ten men? Is it not further a fact that those are the people who, for the most part, have been squeezed? Will not they be the people who will go bankrupt and, in turn, affect the production of everyone else? Why are the Government following this insane policy?

Sir E. Boyle

The right hon. Gentleman will find that there is a later Question on this subject upon the Order Paper.

35. Dr. D. Johnson

asked the Chancellor of the Exchequer if he is aware that the credit squeeze is pressing with particular severity on the small independent businessman; and what action he will take to mitigate this.

Sir E. Boyle

My right hon. Friend is aware that small traders, like other members of the community, are finding it more difficult to get credit. But he does not think that the limitation of credit is affecting them so severely that he ought to ask the banks to discriminate in their favour.

Dr. Johnson

Is my hon. Friend aware that the banks appear to be working on the principle of "the smaller the man the tighter the squeeze"? Will he ask them to tackle their larger customers with the same ferocity as they sometimes use towards their smaller ones?

Sir E. Boyle

If my hon. Friend has any evidence that he would like to send me in writing I shall be glad to consider it, but I would remind him that the control of credits to large businesses is operated not only by the banks but also by the Capital Issues Committee.

Mr. Gaitskell

Is the hon. Gentleman aware that his hon. Friend has accurately stated Tory Government policy in his Question? Is he further aware that there is an automatic discrimination against the small man, because of his lack of reserves? Would not it be desirable to ask the banks to counteract this discrimination and allow credits upon rather easier conditions to smaller businessmen?

Sir E. Boyle

It was precisely with the second half of the right hon. Gentleman's question in mind that I referred to the control now being operated by the Capital Issues Committee. With regard to the first part of his question, I think I can claim to be at least as authoritative an exponent of Conservative policy as he.