HC Deb 30 April 1888 vol 325 cc884-5
MR. CALDWELL (Glasgow, St. Rollox)

asked Mr. Chancellor of the Exchequer, What rate and what amount of interest, if any, the Government pay to the Bank of England in respect of the Government Debt of £11,015,100, held in security by the Issue Department of that Bank, and opposite which bank notes are issued?


The Government Debt to the Bank of England has, ever since 1757, borne interest at the rate of 3 per cent per annum. I may add that the amount at which the Debt stood in 1844—namely, £11,015,100, was, by the Act of 1844, made part of the securities required to be transferred to the Issue Department; and that the arrangements made by Sir Robert Peel were based on the supposition that the gross profits derivable from note issue, of which, as the House is aware, the Government derives a substantial share, would be 3 per cent. Accordingly, the rate of interest payable on the Bank Debt, affecting as it does the profits of the Bank in its Issue Department, is a question which can properly be only taken into consideration on there being a general revision of the financial relations of the Government with the Bank of England.