CLAUSE 1.—(Grants for Public Works.) (Hansard, 22 July 1924)

§ Sir F. WISE
There were one or two definite questions that I put to the Financial Secretary on the Second Reading of this Bill, and especially as to Clause 1. In this it states that the Public Works Loan Commissioners shall issue a sum not exceeding, in the whole, the sum of £25,000,000. I then asked the Financial Secretary whether this was pounds sterling or stock? As he may possibly remember, two or three years ago the Public Works Loan Commissioners' stock had fallen to 50. I think the present price is about 63 or 64. I also made the suggestion to the hon. Gentleman that, while in the old days these loans were tendered for, and while I quite agreed 1276 that £25,000,000 was rather a large sum to be tendered for, he might consider that any new loan the Commissioners issued should not be issued at a large discount, which it would have to be at the present time, but nearer par. I should appreciate some reply to my questions.

Mr. GRAHAM
I shall be delighted, in a few sentences, to reply to the points raised by the hon. Member. What is represented by "twenty-five millions" is pounds, and we believe that this sum, will be sufficient to cover the requirements of the Local Loans Fund for the year that is involved. As regards the points put on the Second Reading, the first turns upon the issue of a new stock. The difficulty, of course, is that if we embark upon a new stock at the present time at, say, 4½ per cent. interest, that would create two classes of local loan stock, and I have not the least doubt that my hon. Friend would agree that the issue of such a stock would depreciate the 3 per cent. stock by which this fund is replenished. That argument, I think, will not be pressed, although I agree at some later date it might he necessary to consider that question. The hon. Member put another point as regards tenders. The short reply is that this is a long-term stock, and it is favoured by the National Debt Commissioners, by trustees, and by others. We have to weigh up the advantages and disadvantages of issuing stock by tender. In 1912 stock was put out to tender and our experience is, perhaps, in favour of adhering to the present method. On that point, I can say to my hon. Friend that the Treasury and the Government are quite willing to consider, in the near future, whether the system of tenders might not he adopted. Our case now is that it would be better to adhere to the present method.

§ Sir F. WISE
It practically means that you have to issue about £40,000,000 worth of stock, and that is a very large sum. It affects all your loans, and you will probably have to make two issues. I see no objection to two issues. I cannot see that it would be any more costly. In fact, I think it would be cheaper from the national point of view because it would support the national War Loan. This is really a national War Loan, although it is not called that, and I wish between now and the Third Reading the 1277 hon. Gentleman would seriously consider the possibility of making an entirely new issue of public loans. If he would do that, it would be better from the national point of view and it would also be cheaper.

Mr. GRAHAM
We propose to take the Third Reading now. It is an annual Measure and it is not controversial. But apart from that, as regards the future, I could not for the moment promise to entertain the idea of issuing a new stock because of the depreciation which would result in regard to the 3 per cent. local loan stock. I think this is a matter which would require some investigation. If the Bill goes through to-night that is a matter which we might profitably consider from another angle, that is the angle we discussed last night of the possibility of utilising these powers to assist the local authorities to raise money for the new housing scheme. I should be out of order in dealing with that point, but it is along those lines that this problem must be considered. I cannot give a promise in regard to the new stock, because of the difficulty I have mentioned.

§ Sir F. WISE
Does the hon. Gentleman realise that this stock two or three years ago was issued at 50, and now stands at between 63 and 64—a rise of 13 or 14, which has been to the detriment of the nation?