HC Deb 12 July 1966 vol 731 cc1205-6
28. Mr. Rowland

asked the Chancellor of the Exchequer what estimate he has made of the effect on the costs of goods and services of the use of bank credit cards; and if he will make a statement.

Mr. MacDermot

No estimate is possible.

Mr. Rowland

May I tell my hon. Friend that I am slightly disappointed by that Answer, and may I ask him to look at this matter again? Would he not agree that these bank cards create demand inflation and cost inflation because someone must pay for this credit to the holder of the card? Would he not also agree that there is a growing and quite unnecessary snobbishness in the use of these cards?

Mr. MacDermot

With regard to the question of increasing the costs, this does not necessarily follow. There may be some offsets as a result of increased turnover. There could also be savings as a result of a reduction in other forms of credit and perhaps in consequence a reduction in the handling of cash. I do not feel qualified to comment on the other point.

Mr. Sheldon

Is my hon. Friend aware that it is of little use urging credit restraint upon banks in lending money to industrial organisations when at the same time they are lending it for the purposes of consumer inflation?

Mr. MacDermot

This scheme is well contained within the existing Government credit restraint policies and that is fully understood by the banks concerned. This lending will have to be kept within the limits of the reduced total credit available for the personal sector after priority has been given to exports and other important categories.

Sir C. Osborne

Is not the greatest problem facing us now the excessive demand in the home market, and will not this cause that demand to be greater? Therefore, ought there not to be some check upon this inflationary movement?

Mr. MacDermot

The steps that are already taken to reduce the payment include the restriction of credit. This scheme is contained well within those restrictions, and I do not think it is right, within this restriction, to stop people adopting modern techniques if they promote greater efficiency.