HC Deb 25 June 1957 vol 572 cc11-2
19. Mr. Collins

asked the Chancellor of the Exchequer if he is aware that since 1949 the £ sterling has depreciated in value more than any European currency, excepting Norwegian, and that the average rate of depreciation exceeds the present annual return on Government loans; and what steps he is taking to restore the value of the £ sterling and encourage investment in Government securities.

Mr. P. Thorneycroft

The answer to the first part of the Question is "No, Sir". As regards the second part, the efforts of the Government, which have had some success in checking inflation over the past year, will continue.

Mr. Collins

But is the Chancellor aware that with the decline in market prices of securities and the decline in the value of the £ since 1951, the real value of Government securities has dropped by some 50 per cent.? Is it part of a step towards a property-owning democracy to deprive people of half their property? Will not the Chancellor tackle this matter at its economic cause, because it is a real disaster for many people?

Mr. Thorneycroft

We shall be much assisted in this matter by requests for economy from both sides of the House of Commons, and by avoiding suggestions that we should pour out capital to local authorities without recourse to the market.

Mr. Osborne

Can my right hon. Friend say, as a matter of historic accuracy, whether or not the greatest depreciation in sterling in those years took place in 1951?

Mr. Thorneycroft

It has certainly taken place consistently under both Governments, mainly because we have all been trying to take more out of the economy than we have put in.

Mr. Roy Jenkins

But is not the present state of the gilt-edged market such as to bring into question the whole future of the fixed interest market in this country? At a time when the credit squeeze is slightly relaxed, the Bank Rate is down, and the Bank of England is pumping out credit, the only question is whether Consols will go below 50? Surely that is an extraordinary position. What will the right hon. Gentleman do about it?

Mr. Thorneycroft

One thing I can do is to resist suggestions for relaxing the credit squeeze and making credit even more freely available, as has been suggested in Questions this afternoon.