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Capital Issues Committee (Instructions)

Volume 463: debated on Thursday 14 April 1949

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asked the Chancellor of the Exchequer what fresh instructions he has issued to the Capital Issues Committee in view of the publication of the Economic Survey for 1949.

I have today addressed a Memorandum to the Capital Issues Committee and, as on similar occasions in the past the banks are being requested to apply the principles enunciated in it to the granting of credit facilities to their customers. I have no doubt that they will readily continue to give their co-operation in this matter.

The terms of the memorandum are as follow:

The general principles, in the light of which the Committee at present considers applications for consent to new issues of capital, are set out in the Memorandum of Guidance of 31st May, 1945 (Cmd. 6645) and the Special Memorandum of 2nd December, 1947 (Cmd. 7281). The Special Memorandum called for a revision of emphasis in view of the serious changes in the balance of payments position and the review at that time by the Government of the Capital Investment Programme of the country.

The general position has been continuously under review; and the Economic Survey of 1949, which has just been issued (Cmd. 7647) gives an up-to-date appraisal of the economic position of the country, and reviews (in paragraphs 39–46) the competing claims on investment resources. The conclusion to which the Survey points is that, after allowing for expenditure on maintenance (including wartime arrears), the resources which can be devoted to new investment are strictly limited in relation to the demands likely to be made on them. The Capital Issues Committee is, of course, primarily concerned with developments affecting the private sector of the national economy. Here the main emphasis of Government policy is on:

(i) The increase of capacity needed to overcome shortages of basic materials.

(ii) Projects likely substantially to increase exports to hard currency markets or to bring about marked and direct savings in imports from hard currency sources.

ESTIMATED SUBSIDIES IN FOODSTUFFS
1948–491949–50(as originally anticipated)
£ million£ million
Bacon15·728·1
Breadincluding wheat acreage payments65·170·2
Flour other than for bread33·840·9
Shell Eggs23·235·5
Carcase Meat59·691·6
Milk (a)42·061·5
Butter (b)41·046·3
Cheese (b)19·722·2
Margarine (domestic)15·718·7
Cooking Fat (domestic)5·06·5
Lard0·91·9
Potatoes (including acreage payments)21·013·9
Sugar (domestic)23·228·6
Tea17·724·6
Other Foods—Credit[8·2][10·4]
Animal Feedingstuffs61·536·6
Board of Trade—
Subsidies on fertilisers and molasses12·313·9
Welfare Schemes:
National Milk Scheme25·125·1
Milk in Schools8·09·5
Other Welfare Foods2·72·8
TOTALS485·0568·0
Notes: (a) Including the manufacturing milk subsidy.
(b) Excluding the manufacturing milk subsidy.