Interest Rates

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 4th November 1969.

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Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton 12:00 am, 4th November 1969

asked the Chancellor of the Exchequer if he will carry out an investigation into the current level of interest rates charged by joint stock banks, merchants banks, finance houses and other companies in this field.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I do not think such an investigation would be useful.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Is my right hon. Friend aware that there are some companies charging very exorbitant rates of interest, taking advantage of the current situation, and that this is having a particularly harmful effect on small companies which, by the very nature of things, are predominant in development areas where they seek to take advantage of Government incentives? Will my right hon. Friend reconsider his answer?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

No, Sir. My hon. Friend asks me in the Question whether an investigation will be helpful. I do not think that it would be. My hon. Friend is quoting cases of which he is aware without investigation and which reflect to a certain extent the market rates.

Photo of Sir Arthur Harvey Sir Arthur Harvey , Macclesfield

If the right hon. Gentleman carried out an investigation, he might find it enlightening. A great many firms, even some in development areas, which have to import materials, frequently for re-export, are now faced with the financing of import deposits and are having to face this extraordinarily high rate which they never expected to pay for the current year.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

We were aware of those circumstances, and the result is contained in what my right hon. Friend said in answer to the previous Question.