§ 9. Mr. Henry Clarkasked the Chancellor of the Exchequer what has been the increase in the note issue of British banks in the last 12 months; and how much Government spending and lending he intends to finance by further increases in the note issue in the current year.
§ Mr. Harold LeverBetween February, 1967, and February, 1968, notes in circulation increased by £157 million, from £3,041 million to £3,198 million. The size of future note issues will continue to be determined by public demand for notes.
§ Mr. ClarkWould not the Minister agree that printing new money at the present time represents very muddled economic thinking? As the new notes add to Government spending power, is not it true that they add directly to the speed of our already cantering inflation?
§ Mr. LeverThe answers to all those questions is, "No, Sir." The muddled thinking is on the part of those who believe that any increase in the supply of notes reflects an increase in the money supply. In fact, it is usually merely a convenient way of breaking up the total money supply.
Mr. Gresham CookeWhen production has been almost static, as it has been in the past year, is not it very clear thinking that the issue of £157 million more of notes must tend towards more inflation?
§ Dame Irene WardGive me a thousand.