HC Deb 06 August 1888 vol 329 cc1813-6

Bill considered in Committee.

(In the Committee).

Clause 1 (Issue of £20,693,375 out of the Consolidated Fund for the service of year ending 31st March 1889.)

Amendment proposed—(Mr. Jackson).

MR. CALDWELL (Glasgow, St. Rollox)

asked for some explanation why the Government were taking such large borrowing powers.


said, that the Amendment did not deal with the question of borrowing powers. The reason for the change in the figure was the addition of the sums voted in Committee on Friday and Saturday and confirmed in that day's Report.


asked, was he to understand that it would be necessary to borrow more in the course of the year?


said, of course, borrowing would take place if it became necessary, but if meantime money came in fast enough from ordinary sources borrowing would be unnecessary.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 2 (Power to the Treasury to borrow).

Amendment proposed, to leave out "£2,365,400," and insert "£20,692,375."—(Mr. Jackson.)

MR. CALDWELL (Glasgow, St. Rollox)

said, his remarks as to borrowing applied particularly to this clause. The Government were in the habit of borrowing money on Treasury Bills. They borrowed for three, four, and sometimes six months at a time, and at a time when they had long balances to their credit on other accounts. When he brought this matter before the notice of the right hon. Gentleman the Chancellor of the Exchequer (Mr. Goschen) on a previous occasion, the right hon. Gentleman explained the difficulty that existed in regard to the Act of Parliament which required that the money thus borrowed in one year should be repaid within that year. But as he understood the financial arrangements, that difficulty could perfectly well be met by using other balances. He did not think that the managers of any other business concern would think of borrowing for one account while they had a large balance in hand on another account. The Government might very well take power in this Bill providing that one Department in respect to which there were large balances standing to its credit should transfer or lend to another Department in want of funds. The Indian Government had sometimes a considerable balance in hand, and the Indian Government were in the habit of lending for short periods, and the interest accruing was credited to their account. In a like manner might the Government get the benefit of accumulated cash balances. Now, the Bank of England had the advantage of the money standing to the credit of the Government accounts, lent the money, and pocketed the interest. There was no reason, so far as he could see, nor so far as the right hon. Gentleman the Chancellor of the Exchequer had shown in his explanation, why in this Bill provision should not be made for lending money from one account to meet deficiencies in another.


said, the hon. Member bad mentioned that this question had already been brought to the attention of his right hon. Friend the Chancellor of the Exchequer, and if he remembered rightly his right hon. Friend in his answer explained that he had previously given close attention to the question of cash balances of the current year. This was the fact, and his right hon. Friend had considerably reduced the account standing to the credit of the Government, and diminished the amounts borrowed from time to time. He need hardly point out that borrowing upon Treasury Bills was about the most economical manner of raising money, for the average rate of interest during the year had been little more than 1 per cent. He did not think it would be possible to adopt a plan more economical than that. Then the question whether moneys belonging to the Indian Government should be mixed up with the accounts of the Home Government was a much larger question, and not to be dealt with on the present occasion. His own opinion would be distinctly against it.


said, the hon. Gentleman had misunderstood his allusion. He did not ask that the accounts of the Indian Government should be mixed up with Home accounts, he only mentioned that the Indian Government lent from the surplus funds in their hands, and what he wished to point out was that if the Indian Government could do that with their money why should not the Imperial Government do the same, why instead of borrowing money from strangers should not one Department lend to another and thereby save money. It was quite true that the right hon. Gentleman the Chancellor of the Exchequer had been making some small savings, but it was very small in amount compared with what he might make. Money went into the Bank of England, and the Bank of England lent it to those who required money to meet the withdrawals from the banking accounts; the Government did not get the benefit they might get, and which the Bank of England did get.

Amendment agreed to.

Clause, as amended, agreed to.

Remaining Clause agreed to.

Bill reported; as amended, to be considered To-morrow.