HC Deb 06 July 1927 vol 208 cc1265-7
55. Mr. LUNN

asked the Chancellor of the Exchequer what is the total amount of the guarantee by the British Government, under the Trade Facilities Act, towards the construction and equipment of the Cornerbrook, Newfoundland, paper and pulp work; whether the negotiations for the sale of the works to an American combine has been completed; and what is the likelihood of the British Government receiving back the full amount of its outlay on these works?

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill)

His Majesty's Government guaranteed in 1922 under the Trade Facilities Acts the payment of interest and principal in respect of £2,000,000 "A" debentures of the Newfoundland Power and Paper Company. As regards the negotiations for sale by the company of their property, I have nothing to add to the reply which I gave to my Noble Friend the Member for Shrewsbury on the 28th June. The hon. Member will observe that this transaction was a guarantee of the service of certain securities of a commercial firm. His Majesty's Government have not at present been involved in any outlay.

Captain GARRO-JONES

When these advances are made to these people, is there no safeguard in the guarantee that the concern will not be transferred out of the control of British owners?

Mr. McNEILL

I do not understand the hon. and gallant Member.

Captain GARRO-JONES

When these sums are guaranteed by the British Government, is there no safeguard in the guarantee to ensure that the property will not be transferred to foreign hands?

Mr. McNEILL

I could not answer the question in that form without notice. Of course, we have control over the securities.

Sir FREDRIC WISE

May I ask whether this £2,000,000 is a first charge on the property and whether the £2,000,000 is guaranteed by the British taxpayer and the taxpayer of Newfoundland?

Mr. McNEILL

I could not say anything with regard to the taxpayer in Newfoundland. My hon. Friend knows very well the conditions of the Trade Facilities Act. These are "A" debentures, which are a first charge. We guarantee the principal and interest of these debentures.

Sir F. WISE

Are there any other debentures to be put in front of the "A" debentures?

Mr. McNEILL

Not that I am aware of, but I would like notice of the question if my hon. Friend wants a precise answer.

Colonel GRETTON

Is the guarantee of the British Government to be continued to a foreign combine?

Mr. McNEILL

I have already said, in answer to former questions, that negotiations are going on, and it is impossible at present to make any statement with regard to those negotiations. The question put to me by my right hon. and gallant Friend might involve what are the terms of the negotiations.