§ 26. Mr. Turtonasked the Chancellor of the Exchequer what was the percentage increase of the total money supply in each of the three years ending on 30th September in 1965, 1966 and 1967, and the percentage growth of the gross domestic product at constant prices in the same three periods.
§ Mr. Harold LeverThe increases in the money supply in the three years were respectively 6.4 per cent., 6.2 per cent. and 8.0 per cent., and the increases in the gross domestic product at constant prices were 3.1 per cent., 1.7 per cent. and 1.6 per cent.
§ Mr. TurtonIs it not clear from this that as was pointed out in "The Programme of National Recovery," this is the root cause of our troubles, rather more than wage-cost inflation? What steps are the Government taking to correct this damaging position, when money supply increases 8 per cent. and the total gross domestic product is increased 1. 6 per cent.?
§ Mr. LeverThe Government are taking effective steps to control overall money supply by controls on bank lending, where, as hon. Members are aware, a ceiling has been imposed, except for exports, and by a firm curb on net Government borrowing too.
§ Mr. PagetIs it not a fact that we live in a cheque economy, and that the extent of the note issue is entirely irrelevant?
§ Mr. LeverI was dealing with the money supply. We have passed from the irrelevancies of the note issue to the money supply itself, which of course in- 1218 eludes bank balances and the cheques which make those bank balances mobile. My hon. and learned Friend's question would have been very useful at an earlier point in our proceedings.