HC Deb 19 December 1916 vol 88 cc1419-20

"That the Treasury may borrow in such manner as they think fit, on the security of the Consolidated Fund, any sums required for raising the Supply granted to His Majesty for the service of the year ending on the thirty-first day of March, nineteen hundred and seventeen, and in addition a sum not exceeding two hundred and fifty million pounds, and that there shall be charged on the Consolidated Fund—

  1. (a) any sums which may be required to be so charged in the exercise in connection with any money to be so borrowed of any powers which were given by the War Loan Act, 1914, or the War Loan Act, 1915, or any other enactment in connection with money borrowed under the War Loan Acts, 1914 and 1915, or any other enactment; and
  2. (b) any sums which may be required for expenses of the redemption of any securities issued for the purpose of money to be so borrowed or of money borrowed under the War Loan Acts, 1914 and 1915, or any other enactment; and
  3. (c) any sums which may be required for the remuneration of the Banks of England and Ireland in connection with the management of any securities issued for the purpose of money to be so borrowed or of money borrowed under Section fifty-eight of the Finance Act, 1916."—[Mr. Bonar Law.]

Mr. D. MASON

May I assume that the Bill will provide for the refunding of the floating debt? I assume that one of the objects of the next loan will be in some way to get rid of part of the floating debt which now amounts to a very large sum. Of course, the right hon. Gentleman is aware, that in addition to our floating debt, there is a large amount of paper as well as the advances to our Allies, and I think he will appreciate the supreme advantages of getting rid of some part of this enormous floating debt. He cannot, at this stage, of course, say what form the loan will take, and the Resolutions give power to the Treasury to issue a loan in such manner as they think fit. I should like to offer a few remarks on the extreme advantage of perpetual stock, because, if the loan in future years goes to a premium, there is then the option of conversion, as was done with regard to Consols in the past, and, if it goes to a discount owing to the prevailing rates of capital being high, the Treasury has the great advantage of being able to repurchase its debt at a large discount,. I should just like the right hon. Gentleman to give me an assurance with regard to that matter and to congratulate him on the action of the Government.

The CHANCELLOR of the EXCHEQUER (Mr. Bonar Law)

My hon. Friend is, of course, right in assuming that the terms of the loan will be such as will enable the floating debt to be converted into terminable annuities. Obviously that is an object to be desired by any Chancellor of the Exchequer. Since I am saying a few words on this Resolution, I may make it quite plain what was my meaning yesterday. I then stated that although I took power to raise this loan, it must not be understood that there was no intention to do it while the House was not sitting. I wish there should be no misunderstanding on the point. I have not yet had time to look fully into the matter, but shall do so as soon as possible.

Question put, and agreed to.

Resolution to be reported To-morrow.

The remaining Orders were read and postponed.

Whereupon Mr. DEPUTY-SPEAKER, pursuant to the Order of the House of the 22nd February, proposed the Question, "That this House do now adjourn."

Question put, and agreed to.

Adjourned accordingly at Four minutes before Ten o'clock.