HC Deb 03 February 1969 vol 777 cc35-6W
Mr. Maurice Macmillan

asked the Chancellor of the Exchequer (1) to what extent, over the four year period 1965 to 1968, new credits in the Exchange Equalisation Account, established by the creation of Treasury bills as collateral for new liabilities in foreign currency and automatically transferred to the Exchequer's account at the Bank of England, provided newly created money and helped finance the Exchequer's domestic financial deficit;

(2) what new credits were established, over the four year period 1965 to 1968, in the Exchequer's account at the Bank of England through the additions, in this period, to the notes and coins in circulation;

(3) by what amount any money or credit, created both by the operation of the Exchange Equalisation Account and by additions to the notes and corns in circulation, exceeded the Exchequer's borrowing requirements in the four year period 1965 to 1968;

(4) what was the amount of Government debt sold during the four year period 1965 to 1968, in total and by the banks and the non-banking section of the private sector, respectively.

Mr. Roy Jenkins

Firm figures are not yet available for the fourth quarter of 1968. However, during the preceding three and three-quarter years, between the beginning of 1965 and the end of the third quarter of 1968, the central Government borrowing requirement amounted to £2,588 million; external transactions (including aid bills) contributed £1,881 million; public holdings of notes and coin increased by £382 million; the non-bank private sector took up £14 million of Government debt and the banks £311 million. Further details are in Financial Statistics.

When external transactions reduce the Government's domestic borrowing requirement, as they did in this period, they are a factor leading to a reduction in the money supply.