HC Deb 13 April 1899 vol 69 cc1013-4

But suppose it were possible that a greatly increased price of Consols tempted some of the stock so held on to the market? It is perfectly clear from the figures which I have given to the Committee that the market in which Consols are purchasable by the Government, either for the reduction of the debt or for the investment of Savings Bank deposits, has been dangerously narrowed since 1884. We have now Consols at a very high and a continuously high premium, and nobody knows how much higher they may go. I do not say that that premium is entirely due to the fact that the market for Consols has been so narrowed. No doubt it is due also to the general fall in the rate of interest and to the high credit of this country. But I do say that the narrowness of the market, as compared with past years, has had an appreciable effect in raising the price of Consols, and that by our increased purchases in that market we are practically raising the price of what we desire to buy against ourselves. Well. Sir, but this, as years go by—and very soon—will be an increasingly serious matter with regard to the redemption of our debt. If we insist, despite all the changed conditions which, I believe, were never anticipated for a moment by the authors of the existing arrangement, in devoting year by year an amount to the redemption of debt larger in proportion to the outstanding amount of our debt, and far larger in proportion to the purchasable amount of our debt in the market than was ever considered necessary to be so devoted in past years, I think that a persistence in this policy would constitute a real danger to the Sinking Fund.

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