HC Deb 10 February 1927 vol 202 cc276-7

asked the Chancellor of the Exchequer the actual cash subscription and the actual conversion amount into the new Four per cent. Consolidated Loan and the amount the National Debt is increased owing to the issue being made at a discount; and what is the saving of the interest by the transaction?

34. Mr. DALTON

asked the Chancellor of the Exchequer the amount by which the principal of the National Debt will be increased by the recent issue of Four per cent. Consols for the conversion of other maturing debt; and what saving, if any, in the annual interest charge will result from this conversion?


The following figures approximate very closely to the final result:

Bonds converted. Nominal Amount. Amount of 4 Per Cent. Stock created.
£ £
5 Per Cent. Treasury Bonds 9,172,559 10,800,688
5 Per Cent. National War Bonds repayable at 105 65,226,217 81,043,572
4 Per Cent. National War Bonds (tax free) 35,386,501 41,756,071
109,785,277 133,600,331
The difference in face value so shown is £23,815,054, but in order to make a true comparison it is necessary to take into account the 5 per cent. premium over par due on 5 per cent. National War Bonds. With this adjustment the increase in nominal value is £20,553,743.

The cash applications amounted to £81,300,525 4 per cent. stock, the cash proceeds from which will be £69,105,446.

The annual interest charge on the new perpetual stock is estimated to show a saving of approximately £492,000 per annum on the cost of the old securities, including tax concessions, interest, etc.