§ 3. Mr. Sheldonasked the Chancellor of the Exchequer what is the present policy of the Government on the supply of money.
§ The Chancellor of the Exchequer (Mr. Roy Jenkins)As I stated in my Budget speech, and have repeated on a number of occasions since, it is our policy to maintain a close control over money supply and domestic credit expansion in the interests of our overall economic objectives.
§ Mr. SheldonSince the domestic credit expansion is less than that given in the Letter of Intent to the International Monetary Fund, would my right hon. Friend see whether he can allow some selective expansion, preferably by bringing the repayment periods for investment grants nearer and thus stimulating investment in plant and machinery?
§ Mr. JenkinsI do not want to anticipate too much Question No. 5 put down by my hon. Friend the Member for Heywood and Royton (Mr. Barnett) which bears more directly on this matter, but the figure given in the Letter of Intent related only to an expansion over the financial year as a whole. Therefore, my hon. Friend's deduction is a little premature. However, I will bear his suggestion in mind.
§ Mr. CantAs the joint Treasury Bank of England paper to the Hove conference admitted that demand management policy is virtually bankrupt post-Radcliffe, is there not a case for giving money supply a chance? If my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) is worried about money supply, should not he be more worried about the increase in money supply last December rather than the fall in money supply this year?
§ Mr. JenkinsThere is something in that. I have tried to give money supply, rechristened and modified somewhat to "domestic credit expansion", a chance this year, and it seems to have taken its chance fairly well so far.