HC Deb 21 October 1969 vol 788 cc936-7
19. Mr. Ridley

asked the Chancellor of the Exchequer by what authority he requires the joint stock banks to offer specially favourable loans for export credit and for shipbuilding.

Mr. Taverne

The arrangements for fixed rate lending under the special schemes for export and shipbuilding finance were agreed between the Bank of England and the banks concerned. The question of authority does not therefore arise.

Mr. Ridley

If the Government want to subsidise these two activities, will they please pay for them instead of asking the customers of the banks to pay for them as a result of a piece of dirty arm-twisting in the background?

Mr. Taverne

I am not sure that "dirty arm-twisting" is the right way to describe this scheme, which I should think the whole House would welcome, because it provides assurances to exporters and shipbuilders that they are free from the short-term variations in rates.

Mr. Emery

Is the Minister saying that it was not the suggestion of the Treasury that these special rates of interest should be provided? Is not this a case of further Treasury interference with the ordinary financial structure of interest rates?

Mr. Taverne

Of course the Government wish to see this, and we are extremely grateful to the banks for cooperating as they have. But, because of the refinancing facilities made available by the Bank of England, we and the banks can be sure that the growth of fixed rate finance does not constrain their lending in other forms.