§ 8. Mr. Frank Allaunasked the Chancellor of the Exchequer if, in view of the numbers now unemployed, he will relax the credit squeeze, in particular by allowing bank loans to builders to be placed in the priority category.
§ Mr. Maurice MacmillanAs my right hon. Friend indicated in his Budget Statement, we have already relaxed the credit squeeze to the extent of allowing some increase for the time being in the rate of growth of restricted lending. I do not think it would be advisable to make any change in the priority categories at the present time.
§ Mr. AllaunYes, but, despite that, these building firms still cannot get loans. Is it not a fact that 1.300 building firms went bust in the last nine months, mainly for this reason? Would not this practical measure relieve both the colossal unemployment and also the tremendous housing need at the same time?
§ Mr. MacmillanIt would be wrong to single out the building industry, even in present circumstances, for priority for relaxation of restrictions in the face of 213 claims which could be made by other industries for similar treatment.
§ Sir R. ThompsonWould my hon. Friend agree that 1,300 building firms went bust largely for the reasons of S.E.T. and a 7 per cent. Bank Rate? As both these factors have been alleviated, would he pay no attention to this kind of cackle?
§ Mr. MacmillanYes, of course it is true that, particularly among the smaller firms, it was pressure of selective employment tax and Bank Rate, both of which have been ameliorated by this Government, which caused a great deal of the trouble.
§ Mr. DouglasWould the hon. Gentleman not agree that, particularly in Scotland, the activity of the building and construction industry could be extended without any inflationary pressure, because a high proportion of those unemployed in Scotland are in this industry? Therefore, should not distinct administrative steps be taken immediately along these lines?
§ Mr. MacmillanThat is a different question. I still do not think it would be right in the circumstances to make any change in the priority categories for bank loans.