§ (1) The Treasury may borrow from any person, by the issue of Treasury Bills or otherwise, and the Bank of England and the Bank of Ireland may advance to the Treasury on the credit of the said sums, any sum or sums not exceeding in the whole thirty-five million nine hundred and eighty-seven thousand three hundred and fifteen pounds eleven shillings and eight-pence.
§ (2) The date of payment of any Treasury Bills issued under this Section shall be a date not later than the thirty-first day of March, one thousand nine hundred and twelve, and Section 6 of the Treasury Bills Act, 1877 (which relates to the renewal of bills), shall not apply with respect to those bills.
§ (3) Any money borrowed otherwise than on Treasury Bills shall be repaid, with interest not exceeding five pounds per cent. per annum, out of the growing produce of the Consolidated Fund, at any period not later than the next succeeding quarter to that in which the money was borrowed.
§ (4) Any money borrowed under this section shall be placed to the credit of the account of the Exchequer, and shall form part of the said Consolidated Fund, and be available in any manner in which such Fund is available.
§ Mr. JAMES HOPEI beg to move to leave out the words "or otherwise" in Sub-section (1). I wish to know what are the alternative methods of borrowing which the right hon. Gentleman contemplates?
§ Mr. HOBHOUSEThe Treasury may get money by advances from the Bank, and not by the issue of Treasury Bills. I think the hon. Gentleman knows what the term means.
§ Mr. JAMES HOPEI beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPEI beg to move in Sub-section (2) to leave out the word "March" ["March one thousand nine hundred and twelve"] and to insert instead thereof the word "September." In the Short Loans Bill last year that was introduced to meet the very peculiar situation which arose from the refusal of the Government to collect Income Tax. The borrowing powers extended until September. I should like to know why they take power to borrow for a very much longer term in this instance.
§ Mr. HOBHOUSEPerhaps the hon. Gentleman is not aware of the existing law which requires that all Treasury Bills shall be paid within the year in which they are borrowed unless there is special legislation to the contrary. The temporary powers we had were extended last year in order to meet the exceptional financial circumstances of the year. The ordinary date on which Treasury Bills expire is within the financial year. It is to meet that that we require March and not Sep-tember as the proper date.
§ Mr. JAMES HOPEThis Amendment was really consequential and in order to make the borrowing powers extend only to this September. I may be wrong but I thought the Bill last year only took borrowing powers for six months.
§ Mr. HOBHOUSETo September.
§ Mr. JAMES HOPEBut not the September of this year. This Amendment is an Amendment by way of restriction. You want more borrowing powers now than you took last year under those very exceptional circumstances.
§ Mr. HOBHOUSE"The date of payment of any Treasury Bills issued under this section shall be a date not later than the 31st of March, 1912," that is to say, the end of the financial year within which they are borrowed. It is not an extension. It is the usual process.
§ Mr. JAMES HOPEYou take power for a year. Last year you only took power for six months.
§ Mr. HOBHOUSENo. It was six months over the financial year. This is within the financial year.
§ Mr. JAMES HOPEOn that point I am quite satisfied with the explanation.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPEmoved, in Subsection (2) to leave out from the word "twelve" to the end of the Sub-section.
This point was taken by the hon. and lamented Members, father and son, Mr. Thomas Gibson Bowles and Mr. George Bowles. They pointed out frequently that this was an extension of the former practice, that formerly these Bills had to be repayable the next sinking quarter, and that from the year 1902 the Government—I admit a Conservative Government—took much wider powers. I do not think that these wider borrowing powers should be given, at any rate to the present Government. In 1902 they were all right. I want to know how the right hon. Gentleman justifies the Treasury having these powers, for they are quite against former Liberal precedents.
§ Mr. HOBHOUSEI do not follow the purport of the right hon. Gentleman's amendment. The clause as it stands is the usual clause giving the usual powers to the Government of the day for the transaction of financial business.
§ Mr. JAMES HOPEThe usual powers now, but they were not usual before 1902. The extension of powers then given was resisted and criticised severely by the friends of the right hon. Gentleman. How does he justify adherence to this Tory precedent created in 1902?
§ Mr. HOBHOUSEThe criticism must have proceeded from the Conservative Benches if the proposal was criticised by Mr. Gibson Bowles.
§ Mr. JAMES HOPEAnd from your Friends too.
§ Mr. HOBHOUSEIt was not joined in by me, nor so far as I know by any of my hon. Friends.
Captain CRAIGI find that in the debate which took place in March, 1909, the right hon. Gentleman introduced the debate himself, and Mr. Stewart Bowles in bringing forward a somewhat similar motion pointed out that the old principle was only altered in 1902, and he said that this increase of the borrowing powers of the Treasury means an increase of unfunded 792 debt, and that it was proposed in a moment of inattention in the year 1902. What my hon. Friend behind me said is quite true. Up to that date it was incumbent upon the Treasury to have the twelve months instead of the three, and he is now striving to revert to this limitation by his Amendment. It is quite a sensible one, because the extension of the borrowing powers of the Treasury means the passing of control more or less out of the hands of this House. The object of the Amendment is to keep a close hand on the finances of the country as far as possible to do so under a Radical Government. I think that the right hon. Gentleman ought to accept the Amendment. It is put forward in a very temperate way. Hon. Members opposite explained when seeking the suffrages of the people that it returned to office they would keep a close eye on the financial proposals of the Government. This Amendment would carry out strictly those pledges, and satisfy a great many of their supporters in the country. It is a very simple matter, making the Treasury responsible for three months instead of for a year, and I shall be glad to vote for the Amendment.
§ Amendment put, and negatived.
§ Mr. JAMES HOPEI beg to move to leave out the word "five" ["not exceeding five pounds per cent. per annum"] and to insert instead thereof the word "four."
Does the presence of the word "five" suggest that the Government contemplate that they may have to borrow money at 5 per cent.?
§ Mr. HOBHOUSEMy answer is in the negative.
§ Mr. JAMES HOPEThen why should it appear year after year that we may borrow money at this exorbitant rate, and why should the Treasury have power to borrow money at 5 per cent. it that figure is unnecessary?
§ Question, "That the word 'five' stand part of the Clause," put, and agreed to.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. JAMES HOPEI think we have shown the right hon. Gentleman that we have arguments which we could have applied to the Bill during the next two hours, and I would beg to remind the Prime Minister of the grave risk he ran in making the rash statement he did yesterday that no one was able to raise a 793 discussion in Committee. I think the Clause is unnecessary, but I do not propose to divide against it.
§ Question put, and agreed to.
§ The CHAIRMANWith regard to the new Clause standing in the name of the hon. and gallant Member for East Down (Captain Craig), I have not had time to refer back in order to ascertain whether or not this Clause has been moved before on a Consolidated Fund Bill, which is not what is technically known as an Appropriation Bill. But whether that be the case or not I have been looking carefully into the proposed new Clause, and I find that there is nothing in it to alter the present state of the law, and therefore it is not in order.
§ Mr. JAMES HOPEMr. Thomas Gibson Bowles was allowed to move a Clause last year which was identical in words with the present Clause put down by the hon. and gallant Member.
§ The CHAIRMANI have since further considered the matter, and, as regards this Bill, I have come to the conclusion that the new Clause is not in Order.
Bill reported, without Amendment; to be read the third time upon Monday next.