§ Moved, "That the Bill be now read the second time."—(Mr. Chancellor of the Exchequer.)
§ MR. HUBBARD
asked for some further explanations of this measure. The title of the last Bill would exactly suit it, for it was really a Bill for the reduction of the National Debt. It permitted the Chancellor of the Exchequer to cancel £5,000,000 Three per Cent Stock, and to substitute for it an equal value in terminable annuities. The interest of the £5,000,000 was £150,000 per annum, while the annual payment required on terminable annuities would be £330,000. The difference would be that in the first year of the operation of the Act the country would have to pay £180,000 more than the previous year on the same security. The House had been engaged the whole evening in discussing the terrible calamity of the cattle plague, and it was undesirable at the present moment to go out of their way and make a forced march with the view of reducing the National Debt. He objected to make this reduction by means of terminable annuities. The fact was, that these securities were not negotiable at all, and were only held in the Government offices. They required a constant re-in- 579 vestment year by year. He had, however, one serious objection to the measure. The right hon. Gentleman the Chancellor of the Exchequer had always displayed an extreme willingness to reduce those taxes which were most open to complaint; but by passing this measure his right hon. Friend, and the House itself, would be precluded from dealing fairly with those subjects in the Budget. His right hon. Friend might be called upon to reduce the fire insurance duty or other taxes which weighed prejudicially on the energies of the people; but if this Bill were passed, £180,000 a year would be added to the taxation of the country, and to that extent they would be precluded from an indulgent consideration of the imposts of the country. It appeared to him to be a strange time to select when 7 or 8 per cent was currently given for money, for discharging debts upon which they were only paying 3½ per cent.
§ THE CHANCELLOR OF THE EXCHEQUER
certainly could not at all complain that his hon. Friend, with the opinions he entertained, should object to the principle of the Bill; but, in considering the operation of the Bill, his hon. Friend entirely omitted to observe the effect of the former Bill. The practical effect was that one measure balanced the other. The object of the first Bill was to produce a true statement of the National Debt, by practically abolishing two funds precisely in the nature of the old Sinking Fund, which Parliament had long ago condemned. Its financial effect was to relieve the country from a very considerable annual charge, which was, of course, a set off, so far as it went, against the annual charge created by the present Bill. The Bill gave power to cancel £5,000,000 of perpetual annuities, and convert them into terminable annuities expiring in 1885; thereby creating, as his hon. Friend had said, a considerable additional annual charge in the interest of the National Debt until that year arrived. He held that it was a wise and provident proceeding in the actual circumstances of this country to use every fair and safe opportunity for the conversion of perpetual into terminable annuities, with a view to the reduction of the annual charge of the debt after a certain term of years. His hon. Friend seemed to think that the additional annual charge for the National Debt in the present instance was one of some magnitude, but it was not so; the whole amount of the increased charge occasioned by the two Bills would 580 be £45,000. His hon. Friend said that these annuities were held only by the Government offices; but these were not the only stocks to fall back upon. There was a sum of £24,000,000 due from the Government to the savings banks, which they could convert into stock whenever it was deemed expedient to do so; therefore, they were not in the least under the necessity of considering whether the present stocks would be a good security for the savings banks. So much for the old savings banks; with respect to the new Post Office savings banks, they were receiving large deposits at 2½ per cent. The current never changed its direction for one moment, it was always setting inwards. Therefore, they were now under no necessity of considering any event so improbable as a total change of circumstances with respect to these institutions. Care would be taken to keep a considerable amount of convertible stock always in hand. If he were wrong in the opinion he held as to the expediency and wisdom of converting perpetual and terminable annuities, let the House interfere; but, if he were right, let them give effect to the measure proposed.
§ MR. ALDERMAN SALOMONS
concurred with the right hon. Gentleman the Chancellor of the Exchequer in the advisability of converting perpetual into terminable annuities; but hoped that the settlement of 1863 would not be disturbed, and that the right hon. Gentleman would insert some words in the Bill stating that there was no intention of interfering with the settlement without the sanction of Parliament.
§ THE CHANCELLOR OF THE EXCHEQUER
said, it was not proposed to interfere with the settlement to which the hon. Gentleman alluded.
said, he quite believed in the soundness of the principle advocated by the right hon. Gentleman, but suggested the desirability of striking out in Committee the 4th clause, which gave unlimited power to the Treasury to carry out the same system in future. He thought that Parliament ought from time to time to be informed of the manner in which Government was acting.
§ MR. AYRTON
wished to call the attention of the right hon. Gentleman the Chancellor of the Exchequer to the fact that at the end of the twenty years the nation would still be indebted to the savings banks to its present amount, but he feared there would be no capital to represent the debt. He should like to know when the termin- 581 able annuities came to an end, and there was a deficit of millions on the part of the savings banks, what security was to be provided for them.
§ MR. AYRTON
feared the amount was to be made a charge on the Consolidated Fund. He wished, however, to point out the fact that the reduction of the National Debt could not be effected by means of annuities terminable at the end of twenty years, for people would not be induced to buy them unless they ran for forty or fifty years.
§ Motion agreed to.