§ 28. Mr. Biffenasked the Chancellor of the Exchequer what assessment he has made of the general effects of the Government's monetary policy; and whether he will now dismantle certain selective methods of monetary restraint, including the hire-purchase regulations and the limits on lending by the joint stock banks.
§ Mr. DiamondMy present judgment is that monetary policy is achieving a degree of overall credit restraint which is appropriate to our current situation. Relaxation would be premature at this stage; the answer to the second part of the Question is, therefore, "No".
§ Mr. BiffenIs the right hon. Gentleman aware that that sort of answer confirms the belief that there is a great deal of complacency in the Treasury at the present state of liquidity in British industry? Is he aware that the November edition of Financial Statistics shows that there has been a fall in liquidity in British industry of about £70 million to £80 million? Is he aware that that will have considerable consequences for the level of industrial investment?
§ Mr. DiamondThere is no question of complacency. This matter is under continual review. I am well aware of the feelings of industry. I am also aware of 194 the estimates of investment. They are broadly satisfactory.
§ Mr. SheldonIs my right hon. Friend aware that the limit on lending by the joint stock banks gives certain advantages to other financial institutions? What plan has he for ending that discrepancy?
§ Mr. DiamondThat is a separate matter. This matter is under continual review and we shall keep it under review again when we get the November returns from the banks. Beyond that I do not think I can answer my hon. Friend more specifically.