HC Deb 01 November 1979 vol 972 cc634-5W
Mr. Hordern

asked the Chancellor of the Exchequer whether he will include the issue of industrial and commercial acceptances within the measurement of money supply.

Mr. Lawson

While acceptances are clearly a close substitute for some types of bank deposit and credit, they are not money in the normal sense of the word. It would therefore not be right to include them in the measurement of the money supply. However, in assessing monetary conditions and reaching decisions on monetary policy, the Government take account not only of the movements of £M3, and other monetary aggregates, but also of other forms of liquidity and credit, of which acceptances are one.

Mr. Hordern

asked the Chancellor of the Exchequer whether he will exert further control over the money supply by tightening control of the monetary base.

Sir Geoffrey Howe

The Government are currently considering whether a system of monetary base control might be an effective means of ensuring the achievement of interest rate changes which are necessary for purposes of monetary control.