§ 5. Mr. Barnettasked the Chancellor of the Exchequer if he will make a statement on the present level of domestic credit expansion; and how this compares with the figure referred to in the Letter of Intent.
§ Mr. Roy JenkinsThe Letter of Intent referred to a figure for domestic credit expansion of not more than £400 million in the financial year 1969–70. In the quarter ended 30th June, domestic credit 812 is estimated to have contracted by some £75 million. This is not, of course, necessarily inconsistent with a net expansion for the year as a whole.
§ Mr. BarnettIf my right hon. Friend decides to change the emphasis and allow domestic credit expansion to reach the £400 million target, has he made any estimate as to how quickly it will have an impact on economic activity?
§ Mr.JenkinsThere are substantial seasonal factors in this development. We should not judge the position for the year as a whole until we see how it develops. I assure the House that I am watching this matter very carefully indeed and that I am anxious that we shall keep, as we have been keeping, a proper control to achieve our objective, but not an unnecessarily tight degree of control.
§ Mr. Bruce-GardyneWas it not almost as foolish to have totally neglected the rise in money supply in 1968 as it is to go to exaggerated lengths in the opposite direction in the current financial year?
§ Mr. JenkinsAs on so many occasions, I would not agree with the hon. Gentleman.