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Government Borrowing (Bank Loans)

Volume 389: debated on Tuesday 11 May 1943

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40.

asked the Chancellor of the Exchequer how much new money has been created by the banks since the outbreak of war?

Advances by the clearing banks to their customers have fallen by over £200,000,000 since August, 1939. As regards loans by the banks to the Government, I have previously explained that the money out of which the banks lend to the Government is, broadly speaking, derived from deposits made by customers in the ordinary course of their business, and that there is no question of banks creating credit for the purpose of lending money to the Government.

Will my right hon. Friend now answer my Question? Is it not true that the new money created by the banks since the outbreak of war to the end of September last was approximately £1,500,000,000?