Oral Answers to Questions — Chancellor of the Exchequer (Statement)

– in the House of Commons at 12:00 am on 29th June 1965.

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Photo of Mr Stratton Mills Mr Stratton Mills , Belfast North 12:00 am, 29th June 1965

asked the Prime Minister if the public statement of the Chancellor of the Exchequer on the British Broadcasting Corporation programme, "Gallery", on 20th May, 1965, about the credit squeeze represents the policy of Her Majesty's Government.

Photo of Mr Stratton Mills Mr Stratton Mills , Belfast North

Has the Prime Minister studied the effect of the credit squeeze, both on the building industry and on the building society movement? Could the Prime Minister answer this specific point? Is it the Government's intention to await the end of the credit squeeze before announcing the methods of implementing their election pledges about lower interest rates for house buyers?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The hon. Gentleman referred to the effect of credit restrictions on new housing starting and I have no doubt that my right hon. Friend may have some interesting figures to give on this when housing is debated on Thursday—which may come as something of a surprise to the hon. Gentleman—so far as the effect on mortgage interest rates are concerned. As I have said, we are working on that problem and will have a statement about it quite soon.

Photo of Mr Julian Snow Mr Julian Snow , Lichfield and Tamworth

Is my hon. Friend aware that there is evidence accruing that public relations consultants of some of the producers of components for the housing industry are blaming the credit squeeze when in reality the blame should be attached to poor programming management by the companies themselves?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

It is not for me to make any comments about either public relations officers or about the building materials industry, but it is certainly the case that, as we suspected, there was no programme of expanded building materials last year related to the expanded housing programme.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Has the Prime Minister made any attempt to co-ordinate the timing of the policies of his right hon. Friend the Chancellor and the First Secretary? Would he not agree that we are now in a situation where there are a large number of inflationary wage claims in the pipeline, while at the same time the deflationary measures the Chancellor is taking will not take effect for some time? Is there not a danger that we shall have both a highly inflationary period and rising unemployment in development districts later in the year?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The restrictions imposed by the Government are to moderate the increase in credit, not to cause a squeeze or a reduction in industrial activity. This is simply illustrated by the fact that the limit for banks and other credit institutions provides for an increase in their lending this year by 5 per cent., which is what I mean when I talk about an increase and not a reduction. But if the hon. Gentleman is simply suggesting that we ought to pursue a more deflationary policy I will take note of what the hon. Gentleman has said, and meanwhile look forward to more support from him than from some of his hon. Friends in the efforts of my right hon. Friend to control prices and haulage rates.