HC Deb 05 July 1956 vol 555 cc1534-5
48. Mr. Dodds

asked the Chancellor of the Exchequer, in view of the difficult economic situation, if he will make a statement in respect of the increase in bank overdrafts by £24 million between January and May of this year; and what action he proposes to take to deal with the matter.

Sir E. Boyle

My right hon. Friend studies the position closely. The total of bank advances in May, 1956 (including of course those to the public utilities) was £205 million less than in May, 1955, and the increase of £24 million between February and May of this year compares with an increase of £95 million in the same period last year. My right. hon. Friend has noted the smaller total increase over the quarter in the face of seasonal trends; and also the signs of a contrast in treatment between, for example, personal overdrafts which fell by £66 million over the year, and the rise in advances to the engineering industries.

Mr. Dodds

Does not the Minister appreciate that the credit squeeze is dealing very harshly with small business men? Is it not also obvious that the big boys, in accordance with Tory tradition, are getting away with it? How much longer is this miserable policy to be continued?

Sir E. Boyle

My impression, and that of my right hon. Friend, is that bank managers have carried out a difficult task with great discretion and skill. The figures I have given today show that it is not true to say that productive investment has taken the brunt of this. On the contrary, personal advances have been squeezed heavily.

Mr. Bence

Is the hon. Gentleman aware that a report in the financial columns of a leading newspaper states that one very large manufacturer in the last few months has been able to double his company's overdraft for the mere purpose of holding stocks because of a shortage of sales in the recent credit squeeze? Is it right that bank overdrafts should be used to hold stocks rather than cutting prices to get rid of stocks and allowing overdrafts to people who want to do some productive development?

Sir E. Boyle

It would not be right for me to comment on an individual case, least of all without notice.