§ 48. Mr. T. WILLIAMSasked the Chancellor of the Exchequer to what extent recent Treasury Bills issued for the purpose of financing the Exchange Equalisation Account have been taken up by Government Departments; whether moneys lying in the Post Office Savings Bank have been utilised for this purpose; and, if so, to what extent?
§ Mr. HORE-BELISHAThe Treasury Bills recently created and issued in connection with the advance of £200,000,000 to the Exchange Equalisation Account were issued by the Exchequer to that Account. The transaction was in the nature of a book-keeping transaction. None of the Bills have been taken up by the Savings Bank or other Government Departments.
§ Mr. WILLIAMSWill the hon. Gentleman tell the House what sum, and from where received, the Government have made available for the Exchange Equalisation Account?
§ Mr. HORE-BELISHAUnder authority of Acts of Parliament the Exchequer made an advance of £200,000,000 to the Exchange Equalisation Account. On the same day the Account lent back the money to the Exchequer for 90 days, and at the same moment the Exchequer gave the Account 90 days' Treasury Bills as an acknowledgment of the loan.
§ Mr. WILLIAMSDo we understand, bearing in mind the statement of the Chancellor of the Exchequer that the Exchange Equalisation Account made a profit, that the only funds available inside the Exchange Equalisation Account are the powers of pen and ink to transfer from one side to the other?
§ Mr. HORE-BELISHANo, Sir, that is an entirely different question. The hon. Gentleman asked me exactly how that part of the transaction occurred, and I have explained it to him.
§ Mr. WILLIAMSMay I ask the hon. Gentleman whether the Exchange Equalisation Account has been made up by borrowing from any Government Department apart from Treasury Bills?
§ Mr. HORE-BELISHAI should like to make this plain. I have seen a suggestion that a very large sum has been borrowed from the Post Office Savings Bank for the purpose of financing Exchange operations. That is a complete misapprehension. No sum at all has been borrowed from that source for any such purpose.
§ Mr. WILLIAMSIn view of the very delicate and speculative nature of the Exchange Equalisation Account, does the hon. Gentleman regard it as not appropriate to borrow from the Post Office Savings account?
§ Mr. RHYS DAVIESIs it not a fact that benefits to people at Employment Exchanges in this country are taken from moneys received at certain Post Offices?
§ Mr. HORE-BELISHAThe hon. Gentleman is referring to something entirely different and makes allusion to another matter. Perhaps the House will permit me to make that plain. Over £100,000,000, representing deposits at the Post Office Savings Bank and Trustee Savings Banks had been borrowed by the Exchequer for the purpose of financing unemployment payments not met out of revenue. It was the business of the National Government to bring that unsound system to an end and to meet these current obligations without recourse to borrowing.
§ Mr. WILLIAMSMay I ask the hon. Gentleman, for the sake of clarity and to remove any anxiety that may exist, if he will be good enough to give the House a frank statement as to exactly 766 the amount of money so far made available for the Exchange Equalisation Account, and where that money was derived?
§ Sir HERBERT SAMUELIs the House to understand that this sum of £200,000,000 has simply been created by paper transactions in the Treasury?
§ Mr. HORE-BELISHAI thought that I answered that question with great particularity. I gave the hon. Gentleman the exact particulars. At any time when the fund requires to use part of their resources for the purchase of Devisen or gold they are at liberty to sell Treasury Bills in the market.
§ Mr. WILLIAMSrose—
§ Mr. SPEAKERThe hon. Member's question has already been answered.
§ Mr. WILLIAMSIn view of the very great importance of this matter, is it not fair to invite the hon. Member to make a frank statement in order to remove anxieties as to where the funds that are being used are derived?
§ Mr. SPEAKERThe hon. Member has answered three or four times.
§ Mr. WILLIAMSIn view of the unsatisfactory reply, I beg to give notice that I shall raise this matter on the Adjournment.