HC Deb 12 July 1915 vol 73 cc646-7
32. Mr. W. THORNE

asked the Chancellor of the Exchequer how many millions of money were invested in Consols before the last War Loan was proposed; whether he is aware that the income from £150 of Consols is £3 15s. at 2½ per cent.; whether, under the new offer of the Government, the holder of £150 of Cousols will receive £100 of War stock, and, instead of his income being £3 15s. it will be £4 10s.; and if he can state what amount of money it would cost the country if all the money that was invested in Consols was converted into War stock?


The nominal amount of Consols outstanding on 21st June, 1915, excluding the amount held by the Government Departments, was … £352,688, 000

On the improbable hypothesis that the whole will be converted into 4½ per Cent. War Loan the following results would accrue:—
(1) The Exchequer would have secured from the holders of Consols subscriptions to the new Loan to a total of £470,250,000
(2) The nominal total capital of the National Debt, for which the State is responsible, would have been reduced so far as the converted Consols are concerned from £352,688,000 to £235,126,000

(3) The charge for interest in respect of the converted Consols would have been increased from £8,817,200 per annum to £10,580,670 per annum for the period from 1915 to 1925, after which date it would be open to the State to take advantage of any fall in the rate of interest that might occur at any time and effect a reduction in the charge for interest by redeeming the 4½ per Cent. War Loan and replacing it so far as necessary by stock carrying a lower rate of interest.

(4) The State assumes the liability of repaying £235,126,000 at par in 1945 at latest if it has not voluntarily redeemed the whole or a portion of that amount at an earlier date.