§ I want to say a few words about the Sinking Fund. In the original Budget the fixed Debt charge was £355,000,000, and under the law as it stands at present that sum will have to be provided before the end of the financial year. An Amendment of the law on this point would in any case have been necessary owing to the alteration of our payments to the United States and the cessation of receipts from the Continent. We have had to consider whether we should provide for Debt redemption on the usual scale, in the financial circumstances of this year and next. In all the circumstances, the Government have come to the conclusion that the proposed. Sinking 303 Fund provision should be, instead of about £52,000,000, £32,500,000 both this year and next year. That sum will suffice to meet our contractual obligations, which we are bound to meet on the terms of the prospectuses on which the loans were raised, including the regular annual provision for the redemption of the 3½per cent. Conversion Loan, the 4 per cent. Consols, Victory Bonds, Funding Loan, and the capital of terminable annuities.
§ It is not proposed this year or next to provide out of the Sinking Fund for the redemption of Victory Bonds tendered in payment of Death Duties. For several years these bonds when received by the Inland Revenue in payment of duties, have been handed over to the National Debt Commissioners who have bought them with money provided out of the Sinking Fund. That is a very convenient method of applying Sinking Fund moneys, but it involves an addition to the Sinking Fund which for the moment we are not justified in continuing. Of course, persons who pay Death Duties by Victory Bonds will still be able to do so. The Sinking Fund payment of about £5,750,000 to the United States will not be required this year, and the expense of providing dollars for the next year's payment—that is, as I have said, just under £6,000,000—will be charged to capital, and we shall substitute a sterling debt to our own people for a foreign debt.
§ The charge then against revenue for Debt redemption is reduced, by these proposals by £13,700,000 this year and £20,000,000 next year. In the Finance Bill the proposals will take the form of a readjustment of the fixed Debt charge, and I will explain shortly how the figures are reached. I told the Committee that the fixed Debt charge for this year, as provided in the Budget, was £355,000,000, and of that sum £52,050,000 was for Debt redemption. The Hoover proposals enable us to reduce the fixed Debt charge to £335,700,000. The further proposals set out above reduce the fixed Debt charge for this year to £322,000,000 of which £32,500,000 will be for Debt redemption and this saving is a further reduction of the deficit of £74,000,000 this year and of £170,000,000 next year.