HC Deb 19 November 1959 vol 613 cc1340-2
56. Mr. C. Osborne

asked the Chancellor of the Exchequer what is the latest known figure for the national hire-purchase debt; how far it has increased since the credit restrictions imposed by his predecessor were removed; to what extent this increase is a sign of renewed inflation; how far a moderate restriction of hire-purchase facilities would help to reduce prices; and if he will make a statement.

Mr. Barber

The latest figure for total hire-purchase debt is £784 million at the end of September. It has increased by £303 million since September, 1958, when the first stage of de-restriction was announced. The movement of these figures cannot in itself be taken as an index of inflation, and there is no reason to believe that the restriction of hire-purchase facilities at this time would have any appreciable effect in reducing prices. We shall, however, continue to keep hire-purchase expenditure under review along with other elements in the national expenditure.

Mr. Osborne

As the Thorneycroft restrictive measures have been abandoned and the hire-purchase debt has increased, as my hon. Friend says, by £300 million, how much further does the Treasury think it can rise without endangering the stability of prices? Will my hon. Friend assure the House, and me especially, that the Government will put price stability as the primary objective of their economic policy?

Mr. Barber

With regard to the latter part of my hon. Friend's supplementary question, it is well known that this is one of the objectives which is uppermost in my right hon. Friend's mind. In answer to the first part, it is expected that the increase in the hire-purchase debt in 1960 will be very substantially less than the increase in the current year. This will be a factor in damping down the rise in demand from now on.

Mr. Denzil Freeth

Will not my hon. Friend agree, first, that, provided that there are sufficient savings coming forth from the community, an increase in the hire-purchase debt need not be inflationary; and, secondly, that per head of population the hire-purchase debt in this country is still substantially below that in the United States?

Mr. Osborne

May I ask my hon. Friend—

Mr. Speaker

Order. I do not know if the Economic Secretary wants to answer the supplementary asked by the hon. Member for Basingstoke (Mr. Denzil Freeth). The hon. Gentleman had better have a chance to do so.

Mr. Barber

I certainly agree with the first part of my hon. Friend's supplementary question, and I think that he is correct in what he said about the relationship between the United States and ourselves.

Mr. Lipton

Does the hon. Gentleman think that it is better from every point of view that more and more people should get more and more into debt?

Mr. Barber

No, but I certainly do not think that hire purchase is in itself a bad thing.

Mr. Osborne

I beg my hon. Friend not to set our policy by the example of the Americans, who are running into inflation as fast as they can. Will he see that the promise given by the Chancellor that we will put the stability of prices above all else is honoured.

Mr. Barber

I will certainly convey to my right hon. Friend what my hon. Friend has said.