HC Deb 28 September 1939 vol 351 cc1485-6
69. Mr. Ridley

asked the Chancellor of the Exchequer the total amount raised or authorised by way of loan for the re armament programme, and the annual interest charges since April, 1937?

Sir J. Simon

As the reply is a long one and contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

I assume that the hon. Member refers to the raising and issue of money under the Defence Loans Acts, 1937 to 1939. Under those Acts Parliament authorised issues to Defence Votes during the two financial years 1937–38 and 1938–39, amounting to £ 211,904,000 in all, and the actual amount issued was £ 192,917,000. For the current financial year the issues authorised on the basis of Estimates presented to date amount to £ 502,430,000, of which £ 68,500,000 has so far been issued. To provide for these issues £ 99,660,000 was raised by the issue of 2½ per cent. National Defence Bonds in April, 1937, and £ 79,596,000 by the issue of 3 per cent. National Defence Loan in June, 1938; £ 28,785,000 was provided by the Budget surplus for 1937–38, and the balance has been covered by an increase in the floating debt.

As regards interest charges, if the hon. Member refers to the actual cost of interest to the Exchequer, I regret that it is not possible to give any firm figure. The two Defence Loans referred to above had to be raised as suitable market opportunities presented themselves and the raising of them did not coincide with the issues to Defence Votes. Also, the surplus from 1937–38 was temporarily used to reduce floating debt until it was required for issue to Defence Votes during 1938–39. Finally the interest payable on the balance of issues covered from time to time by an increase of floating debt varies from week to week.

I should add, however, that under the Defence Loans Acts provision is made for payment of interest by the Defence Departments to the Exchequer at the rate of 3 per cent. per annum. At this rate the annual charge for interest on the total amounts issued in 1937–38 and 1938–39 or authorised to be issued in the current year, namely, £ 695,347,000, will be £20,860,000.