HC Deb 22 March 1973 vol 853 cc654-6
Q4. Mr. McCrindle

asked the Prime Minister what recent discussions he has had with institutions representative of the City of London.

The Prime Minister

I have frequent discussions with individuals or groups from the City, but I have had no recent discussions with institutions representing the City itself.

Mr. McCrindle

Next time the Prime Minister speaks to representatives of the banks, insurance companies and other financial institutions will he, after paying tribute to their continued contribution to our invisible exports, ask them whether they will estimate by what percentage they think their efficiency will increase if and when they are taken into public ownership, as seems to be the policy of the Labour Party? Will my right hon. Friend ask them to give some thought to the future international rôle of the City in that event?

The Prime Minister

I do not think that I would put such an extremely hypothetical question to those in the City, but it is true that the surplus of earnings over payments from the City has grown very rapidly—from £200 million in 1965 to £650 million last year. I am content that the invisible earnings should continue to increase at that rate under a Conservative Government.

Dr. Gilbert

In the light of soaring bank profits and interest rates, is it not high time that the Government required all financial institutions to disclose real interest rates, joint stock banks to disclose their bank charges and, worst of all, the merchant banks honestly to disclose their true profits?

The Prime Minister

That is a very mixed bag of requirements. I do not think that many people in the world would criticise the honesty of the British banking system—a system which for many decades has been the envy of the rest of the world. I do not see how any Opposition Member who is concerned with finance could even think of raising such a question.

Mr. Marten

To what extent does the Prime Minister think that the bank earnings are due to the operation of the Eurodollar market, and, if that is on the way out—as it might be—what effect is it likely to have on our overseas balance of payments?

The Prime Minister

That, again, is a hypothetical question. It is difficult to make any calculations as to the extent to which changes in the number of dollars in the Eurodollar market will affect invisible earnings in this country.

Mr. Paget

Does the Prime Minister agree that at the rate he has been running inflation the City could hardly miss? It has been so wonderfully easy to make money there that one would expect profits to double, as indeed many of them have.

The Prime Minister

The hon. and learned Member for Northampton (Mr. Paget), who always sees things in a rather simple way, should realise that a battle is being carried on against inflation and that under the present Government's policy the charges and everything except interest rates for the whole of the banking system come under the code.

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