HC Deb 24 November 1926 vol 200 cc411-2
73. Sir F. WISE

asked the Chancellor of the Exchequer the amount of cash that has been applied for the redemption of debt since the. Armistice and the reduction of the amount of the annual interest charge since the same date?


With my hon. Friend's permission, I will circulate in the OFFICIAL REPORT the answer to this question, which contains a good many figures.

Following is the answer:

It is not practicable to take the Armistice as the datum line. The first post-War year in which on balance the debt was reduced was 1920–21, and the best starting point is 1st April, 1920. From 1st April, 1920, to 31st March, 1926, the total net cash applied to the reduction of debt was £654,000,000. A direct comparison of the interest paid on debt in 1920–21 and the similar payment in 1925–26 is misleading, unless the changed composition of these payments is taken into account.

In 1920–21 we were not paying in cash interest on the debt to the United States Government: in 1925–26 the payment made on this head amounted to £28,000,000. As the American interest due in 1920–21 was £49,000,000 there is a saving on this head of £21,000,000, which is not represented in the actual cash figures of interest payments. As regards debt other than the debt to the United States Government the annual interest charge has fallen between 1920–21 and 1925–26 by £47,000,000.

It may therefore be said that we are now paying £68,000,000 a year less in interest than we should have been paying in 1920–21 had we in that year met our current interest, obligations. The actual figures obscure this result because 1925–26 includes the full American payment (on the scale reduced by the Funding Agreement) and 1920–21 does not include the interest then due but not paid.