§ Mr. Norman Atkinsonasked the Chancellor of the Exchequer what effect he estimates a fall in minimum lending rate from 14 per cent. to 5 per cent. would have on the retail price index.
§ Mr. Joel BarnettA change in the minimum lending rate would, by itself, 277W have no immediate effect on the retail price index. We would expect, however, that a lower minimum lending rate would lead to a fall in mortgage interest rates, though not necessarily by an equal number of percentage points. A change in the general level of interest rates may also have other, indirect, effects on retail prices through changes in the level of activity, the exchange rate and profit margins. These effects can be quantified only by simulating the change on a macro-economic model.
GENERAL GOVERNMENT EXPENDITURE ON PARTICULAR SERVICES AS A PERCENTAGE OF TOTAL GENERAL GOVERNMENT EXPENDITURE*, WITH RELATIVE RANKINGS IN BRACKETS Per cent. 1950 1973 1976 1977 Military defence† … … 21.3 (1) 12.7 (3) 12.0 (3) 12.6 (3) Social security benefits … … 16.7 (2) 20.3 (1) 21.6 (1) 24.3 (1) National Health Service … … 11.8 (3) 10.8 (4) 11.7 (4) 12.4 (4) Agriculture, forestry, fishing, food … … 9.5 (4) 1.9 (9) 2.3 (7) 1.8 (7) Housing … … 8.4 (6) 8.5 (5) 9.8 (5) 9.4 (5) Education‡ … … 9.4 (5) 14.5 (2) 14.0 (2) 14.4 (2) Other industry and trade … … 0.2 (10) 6.6 (6) 5.3 (6) 1.7 (9) Transport and communication … … 2.2 (9) 2.5 (7) 2.1 (8) 1.8 (8) External relations … … 4.4 (7) 2.3 (8) 2.0 (9) 2.4 (6) Finance and tax collection … … 2.3 (8) 1.3 (10) 1.5 (10) 1.5 (10) Total of above services … … 86.3 81.3 82.2 82.3 * Excluding debt interest and, in 1973, 1976 and 1977, non-trading capital consumption, which cannot readily be allocated to particular services. † The figures used for military defence are in accordance with national accounts definitions and differ from the defence Budget in that they include expenditure on supporting services and other coverage and accounting adjustments. ‡ Including child care in 1950. Source: National income Blue Books.