§ Mr. Gorstasked the Chancellor of the Exchequer if he will consider establishing two rates of interest for minimum lending rate so that the private sector of industry can borrow money required for investment in new machinery, plant or other wealth-creating enterprises at a lower cost than that imposed on non-productive borrowing.
§ Mr. Denzil Davies,pursuant to his reply [Official Report, 11th November 1976; Vol. 919, c. 251–2], gave the following information:
My right hon. Friend has examined this and other schemes for two-tier interest rates, but has concluded that they would be impracticable. In particular, there could be no assurance that investment financed at the lower rate under the scheme would be "additional": the 294W result in many cases would be to free the funds already available to investors, which would otherwise have been used for that investment, so enabling funds to be deposited at the higher rate of interest.