§ 16. Mr. Barnettasked the Chancellor of the Exchequer to what extent, and how quickly, he estimates changes in domestic credit expansion affect levels of employment and economic growth.
§ Mr. Roy JenkinsA discussion of this complex matter would take more time than would be acceptable for an answer to a Question.
§ Mr. BarnettDoes my right hon. Friend now accept the rather more optimistic view of the future prospects put out by the National Institute recently? If so, would he consider relaxing domestic credit expansion to the extent of bringing forward the payment of investment grants, which would help specifically those companies which are investing in new manufacturing investment?
§ Mr. JenkinsI would not accept the latest view put out by the National Institute, and I note that I have a considerable body of support among commentators for not so doing. I would not agree that it was entirely a more optimistic appraisal. It was optimistic in one respect and unduly pessimistic in other respects. I am bound to bear in mind that the National Institute has changed its view of the future fairly often and quickly in recent months.
§ Mr. HordernIn view of the severity of the credit squeeze likely to operate in the next three months during the taxpaying season, what proposals has the right hon. Gentleman to raise the ceiling under which the clearing banks are operating?
§ Mr. JenkinsI have no statement to make at the moment. I will watch the matter carefully. It is possible to exaggerate the severity of the revenue quarter, since I do not believe that most well-managed companies wake up on 1st January and find, to their surprise, that they have tax to pay.
§ Mr. HigginsWould not the right hon. Gentleman agree that the question of timing is crucial as to how long this takes effect? Could he give in broad limits what he thinks the lag is likely to 1279 be between the change in domestic credit expansion and the level of employment?
§ Mr. JenkinsTo some extent it depends on the form which domestic credit expansion takes. This is a complex matter which could usefully be discussed in debate or other fora. But I do not think that a useful answer can be given in reply to a question.
§ 36. Mr. Bruce-Gardyneasked the Chancellor of the Exchequer when he expects to have details of changes in domestic credit expansion during the second quarter of the current financial year.
§ Mr. Roy JenkinsFigures will be published in the December issues of Financial Statistics and of the Bank of England Quarterly Bulletin.
§ Mr. Bruce-GardyneCan the right hon. Gentleman tell the House whether he subscribes to the very official-sounding forecast carried in The Times this morning to the effect that domestic credit expansion this year is likely to be substantially below the figure he gave in his Letter of Intent? If this is so, should he not withdraw the Import Deposits Scheme, which has, after all, increased the severity of the squeeze since the Letter of Intent was written?
§ Mr. JenkinsI suspect that forecasts in The Times sound more convincing to the hon. Gentleman than they do to me. It is too early to make a judgment.