HC Deb 02 July 1957 vol 572 cc864-5
9. Mr. Osborne

asked the Chancellor of the Exchequer if he is satisfied that all the joint stock banks have honoured in spirit as well as in word the Bank of England's request, conveyed as an instrument of Government policy, that they should not increase their lendings to hire-purchase finance companies; and if he will make a statement.

Mr. P. Thorneycroft

The credit policy of the banks is not governed by detailed requests from the authorities. In my Budget statement of 9th April, I recorded the bankers' assurance that they will continue to maintain a restrictive attitude towards advances and will be particularly critical towards advances for the less essential purposes. I have no doubt that the bankers have taken full account of their assurance to me in deciding their attitude towards hire-purchase finance. But I am keeping a close watch on this and all other aspects of credit control.

Mr. Osborne

May I ask my right hon. Friend to believe that this question is not so romantic? Would he please look into the position of the Commercial Bank of Scotland? Is he aware that in 1954 it purchased a hire-purchase finance corporation and is believed to have been pumping large amounts of money through it? Will he look into that and see how inflationary that is in the economy?

Mr. Thorneycroft

I shall certainly consider the particular point my hon. Friend has put to me, because I can assure him that I intend and hope that the assurances which were given to me in April last shall be fully and adequately carried out.

Mr. H. Wilson

Does the Chancellor feel that the joint stock banks are going to be more compliant or less compliant with Government policy now that the Marquess of Salisbury has returned to his duties as a bank director?

Mr. Thorneycroft

I am sure he will be of very great assistance to the Westminster Bank.

Mr. Woodburn

In case there is any misunderstanding, will the Chancellor make it quite clear that the credit and reliability of Scottish banks is as sound as ever it was?

Mr. Thorneycroft

I think it is hardly necessary for me to pay tribute to the credit of Scottish banks.

Mr. Beresford Craddock

Is my right hon. Friend aware that the hon. Member for Spelthorne has banked with the Commercial Bank of Scotland for more than thirty years and that it is a very honourable institution?