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Investments (Planning)

Volume 413: debated on Thursday 23 August 1945

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asked the Chancellor of the Exchequer if the words in the Gracious Speech "the effective planning of investment," extend to the planning and control of the spending by limited companies and others of their own cash resources and to the control of their power to borrow from their banks; and whether he can make any further statement on this and cognate matters.

As I explained in the Debate on the Address, I cannot anticipate in any detail the contents of the legislation which the Government propose to introduce on this subject. The planning of investment has two aspects, the physical and the financial. On the physical side the Government's policy is to secure that the available labour and materials are used in accordance with whatever plans may from time to time be required for the purposes of employment policy and national development. On the financial side the control of demands on the capital market will, as I stated on Tuesday, be exercised according to the same principles. But there is no intention of compelling anyone to invest his resources in one way rather than another. In particular, the proposed legislation will not provide for the exercise of financial control over the use by business undertakings of their own cash or other existing resources. As regards relations between banks and their customers, I do not contemplate any substantial change in the present arrangements. Borrowing from banks is, in certain circumstances, already subject to the capital issues control; and the banks have already been asked by my predecessor to observe the same principles in regard to the granting of advances as apply to the grant of Treasury consent to new issues.