HC Deb 17 November 1976 vol 919 c645W
Mr. Gould

asked the Chancellor of the Exchequer what is the Treasury's central estimate, using its current model, of the effect on the money supply in the relevant forecasting period of (a) a reduction in the value of the £ sterling from $1.78 to the current $1.62 (b) a further reduction of 10 per cent. on the value of the £ sterling and (c) the introduction of a 50 per cent. import deposit scheme with the same coverage as: (i) the 1968 scheme (ii) the current Italian scheme and (iii) any alternative contingency scheme.

Mr. Denzil Davies

The current Treasury model is not equipped to estimate the effects on the money supply of exchange rate changes and import deposit schemes. In any case, as I explained in my answer to my hon. Friend on 18th October—[Vol. 917, c.324–5.]—the net effects on money supply would depend on a wide range of factors and it is not possible to make single precise estimates, even when using a model. As regards the possible direction of the effects on the money supply, I refer my hon. Friend to the earlier answer.