§ 41. Mr. LEACHasked the Chancellor of the Exchequer if it was with the sanction of the Treasury that the Government brokers disclosed the fact, prior to the introduction of the Budget, that the coming War Loan Conversion would be purely voluntary and that no tax would be proposed on fixed interest-bearing securities?
§ Mr. P. SNOWDENThe answer is in the negative.
§ Mr. LEACHCan the right hon. Gentleman say how it happened that, after an unauthorised announcement, the market value of these securities went up so heavily?
§ Mr. SNOWDENI think that the hon. Member had better ask the market for an explanation.
§ Mr. ERNEST BROWN(by Private Notice) asked the Chancellor of the Exchequer whether he is aware that apprehensions have been expressed by certain foreign holders of the 5 per cent. War Loan, 1929–47, that their holdings may be compulsorily converted; and whether he can make any statement on this matter?
§ Mr. P. SNOWDENI welcome the opportunity to make a statement on this matter. The fear that His Majesty's Government contemplate any such compulsory conversion is of course entirely groundless. The proposals made in the Finance (No. 2) Bill in regard to the 5 per cent. War Loan, 1929–47, conflict in no way whatever with the terms of the prospectus under which the loan was issued, and are designed solely to facilitate the voluntary conversion of the loan when conditions are found favourable. The Treasury may in accordance with the original prospectus give notice of their intention to repay the stock at par at a date not less than three months ahead coupling this with a suitable offer to holders to continue their investment on such terms as may be offered. Holders who do not agree to continue will be repaid in cash. Alternatively a conversion offer pure and simple may be made, not accompanied by notice of redemption. In that case holders who do not accept the offer will retain their stock with all their present rights.
Mr. MACLEANIs the House to understand that this particular contractual obligation is the only one that is going to be kept outside the Economy Bill?
§ Mr. SNOWDENThe hon. Member may understand anything he likes.
Mr. MACLEANOn a point of Order. If the right hon. Gentleman will kindly refer to my question in the OFFICIAL REPORT to-morrow, he will find that I asked him whether this House is to understand, not whether I am to understand.
§ Mr. THORNEMay I ask the Chancellor of the Exchequer whether if a very large number of people in this country do not convert and have to be paid in the coin of the realm that will not mean floating another loan?
§ Mr. THURTLEDoes not the Chancellor of the Exchequer realise that my right hon. Friend behind me and hon. Members on this side have a far better understanding of the Chancellor of the Exchequer himself now than they had some time ago?
§ Mrs. MANNINGDoes not the Chancellor of the Exchequer think that these doubts in the minds of the bondholders arise from the fact that the Government are breaking their contracts all round, and will the right hon. Gentleman consider whether he could not allay their fears by taking that portion out of the Economy Bill?
§ Mr. R. A. TAYLORDoes the Chancellor of the Exchequer not think that a great deal of this apprehension is due to the unfounded and alarmist statements which have been made by himself and the Prime Minister as to what would happen if we went off the Gold Standard; and what steps does he intend to take to remove the impression which has been created?
§ Mr. SNOWDENI certainly attribute all the uneasiness which exists to another cause.