ISLE OF MAN LOANS BILL. (Hansard, 22 July 1931)

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

I beg to move, "That the Bill be now read a Second time."

1645 Though this is a small Measure it raises an interesting point. After the explanation I am about to give I hope it will meet with general agreement. Some years ago the Isle of Man Government as a voluntary contribution towards the cost of the War, agreed to assume responsibility for £750,000 of 5 per cent. War Stock. In the year 1927 they transferred £100,000 5 per cent. War Stock to the National Debt Commissioners for cancellation, and are discharging the remainder of their responsibility by paying this country an annuity of £50,000, which payments, covering both interest and sinking fund, would bring their responsibility to an end in roughly speaking, 25 years from the present date. Recently, by a large majority, the Isle of Man Government expressed a desire to pay of their obligations in a lump sum. This proposal has been submitted to the Treasury, and we see no objection to it. For this purpose the island will require to raise a loan in the market and to charge it upon the Inland Revenue. The island's powers of borrowing depend upon the Isle of Man Loans Act, 1880, which is an Act of the Imperial Parliament, and the terms of it would not cover this proposed operation. It is therefore necessary to extend the purposes for which the island is enabled to borrow under the Act of 1880 to include borrowing this loan. The island hopes by this means to secure a reduction in existing charges, substituting for the existing liability of £50,000 a year to the Imperial Treasury a smaller annual payment to an insurance company or other body. The Treasury see no objection to this proposal, and I believe that it will not be regarded as seriously controversial by this House.

§ Mr. KELLY

I wish to oppose the proposal in this Bill. I cannot understand why a Labour Government should be coming forward with such a proposal at this time. We realise that those who represent Labour in the Manx Parliament are opposed to this Measure. I quite understand why wealthy people are supporting this Measure. They have up to the present been able to pay out of reserve all the liabilities that they have undertaken voluntarily with regard to the War Debt. Now we find that these people who have been paying this amount of £25,000 a year—which has not been difficult to them with an Income Tax of 1646 one shilling in the £ and with the very highest Income Tax, 3s. 6d. in the £—have been able to find all the payments to this country out of this particular revenue.

Now we find that the wealthy people of the Isle of Man, realising that there is a possibility of relieving themselves from the payment of this Income Tax and at the same time securing an interest payment of 4½ per cent. by the money that they would loan for this purpose, are going to win at both ends of the scale with regard to this Measure. I am amazed to find that the Government of this country is prepared to accept such a proposal, which institutes for the first time for that part of the country a debt which it has never had imposed upon it up to the present. In view of the efforts that are being made by the Labour party in the Island, who are endeavouring to bring about better housing, to relieve unemployment, and to make wealthy people pay their share, I ask that this foundation for a debt such as we have should not be allowed. Seeing that nine Members of the House of Keys, when sitting in the Tynwald, and the Upper House of the Island, are opposed to this proposal, I ask that further consideration should be given to it, rather than that the Island should have imposed upon it a debt which would mean that the poor people of the Island will themselves be imposed upon, while the rich will sheer off their shoulders this burden. I oppose the proposal.