Statistics

asked the Chancellor of the Exchequer (1) whether he will circulate a table in the Official Reportshowing the increase since the Government took office in domestic credit expansion, sterling M3, the currency reserves, including and excluding the gold content, and the balance of trade on current and capital account;

(2) whether, further to his reply dated 3 December 1979 concerning the quarterly increases in money supply since the beginning of 1976, he will circulate a table in the Official Reportshowing for the same period, or to the nearest quarter, the change in the reserves and in the balance of payments on current and capital account, together with his estimate in each case of the effect each of these had on (a) sterling M3 and (b) domestic credit expansion;

(3) what has been the deficit on the balance of payments on current account in the current year to date compared with the same period in 1978; what effect has this had to date on qualitative and quantitative terms on (a) domestic credit expansion and (b) sterling M3; and whether any further effects are expected;

(4) whether he will circulate a table in the Official Report showing the increase in each half year since 1 January 1976 and the current half year to date of (a) public sector external borrowing less transactions with the International Monetary Fund, (b) transactions with the International Monetary Fund, (c) the increase in the reserves net of (a) and (b) and (d) any adjustment for an increase in the value of the stock of gold; and if he will indicate in both qualitative and quantitative terms what effect each of these movements has had on (i) sterling M3 and (ii) domestic credit expansion;

(5) what was the increase in the gold and dollar reserves in the three months ended 31 July; and what is his estimate of the effect which this had on domestic credit expansion and on sterling M3 in those months or later.

Figures of domestic credit expansion and sterling M3 are provided in table 7.3 of Financial Statisitcs, which also demonstrates their accounting relationship to public sector external finance. Details of components of public sector external finance, including external borrowing, net change in the official reserves and their components, and transactions with the IMF, are shown in tables 2.6, 11.5 and 11.6. The current account balance and investment and other capital transactions are shown respectively in tables 11.1 and 11.3.The relationship between balance of payments flows and the monetary aggregates was discussed in Treasury working paper No. 5 and in an article in the December 1978 edition of the

Bank of England Quarterly Bulletin. Estimates of the relationships in quantitative terms would be heavily dependent on the precise assumptions made about, for example, interest rates and would have to be produced by means of simulations on a detailed economic model. As I have said on a number of occasions, I am unwilling to commit my Department's resources to carrying out such work as it would involve disproportionate cost.

Volume 976: debated on Thursday 20 December 1979