§ SIR STAFFORD NORTHCOTEasked Mr. Chancellor of the Exchequer, Whether his attention has been directed to a speech delivered at Stonehaven on the 17th October, by Mr. R. W. Duff, M.P., one of the Lords of the Treasury, on the subject of the rate of interest charged upon Harbour Loans, and to his statement that the rate of interest on those loans was raised one per cent, by "The Public Works Loans Act, 1679;" whether he confirms that statement; whether there is anything in the Act of 1879 which restrains the Public Works Loan Commissioners from advancing money for Harbour Loans at any rate of interest which does not involve loss to the Exchequer; whether advances are now made at a rate unnecessarily high for the security of the Exchequer; whether it is not in the power of the Treasury to make regulations whereby that rate shall be reduced; and, whether he intends to make such regulations?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)I will first answer the third Question of the right hon. Baronet, and I am afraid that I 1097 must, in doing so, enter into some detail. When the Bill of 1879 was originally introduced by the right hon. Baronet it contained a clause fixing the rates of interest on harbour loans, among others. They were to be according to a scale which required 4¼ per cent interest to be paid on loans for more than 40 years, and less rates for shorter terms. But this clause met with great opposition, and the right hon. Baronet omitted it and took power to the Treasury to fix these rates. He said, however, that he assented to this modification with the distinct understanding—I am using the words of the Minute which he passed at the Treasury—that the Treasury would discharge the responsibility imposed upon them by at once adopting the rates which the Bill originally contained. My hon. Friend the Member for Banffshire (Mr. R. W. Duff) was therefore right in saying that the practical effect of the right hon. Baronet's Act was to raise the rate of interest on harbour loans by 1 per cent—the former rate for long loans under the Act of 1861 having been 3¼ per cent—and this increased rate has been actually enforced since the passing of the Act. But it is also true that by the Act of 1879 the Treasury have power to reduce this rate of interest; and if the right hon. Baronet had been in the House on the 25th of July last he would have heard me say that before the Session of 1885 the Treasury would take into consideration and deal with all the rates of interest on loans made by the Public Works Loan Commissioners, having regard to two circumstances—one, the lower rate at which the Government can now borrow; and the other, the possibility of obtaining collateral security, such as local or county rates. We shall carry out that promise.