HC Deb 18 June 1934 vol 291 cc151-3

10.26 p.m.


I beg to move, in page 15, line 32, to leave out from the beginning, to the end of line 35, and to insert: Provided that—

  1. (a) a conversion loan shall not be guaranteed under this Section unless—
    1. (i) the amount required in each year to pay the interest on the conversion loan is less than the amount which would have been required in the year beginning at the date of the issue of that loan to pay the interest on the loan to be redeemed; and
    2. (ii) the Treasury are satisfied that the substitution of the guarantee of the conversion loan for the guarantee of the loan to be redeemed will benefit the Exchequer; and
  2. (b) where a conversion loan has been guaranteed under this Section the Treasury Shall not guarantee another conversion loan issued for the purpose of providing for the redemption of the first-mentioned conversion loan."
The new proviso which we desire to insert has been drafted with the object of covering a point which we raised in Com- mittee, namely, that where guarantee to a conversion loan is given, the result shall not be that a potential charge on the Exchequer for the sum required to pay the service of the loan shall be increased without reference to this House and that it shall not be possible without reference to this House for a guaranteed loan to go on being converted and converted and a new guarantee given for each conversion without reference to this House. The acceptance of the Amendment would meet two of the objections which we took to the Clause in Committee.

10.27 p.m.


I beg to second the Amendment.

The Clause covers only part of those things which I desire to see covered, and I very much hope that it may be accepted by the Chancellor of the Exchequer or the Financial Secretary to the Treasury, whoever replies. If that be so, it would be ungracious not to be grateful for small mercies, but I cannot forbear to mention once more that it seems to me entirely undesirable that the Treasury should in any circumstances be given the power, without confirmation from this House, of guaranteeing a loan; in other words, of pledging the credit of this country. In the ordinary way, when money is needed for the purposes of our own country, it is customary to come to the House and get confirmation and sanction. Therefore, it seems to me to be more necessary and more important that when & guarantee is needed for some other country—it may be a Dominion or it may be a foreign country—such sanction should be in the power of the Treasury without the necessity to come to the House for confirmation. When it comes to a question of guaranteeing a conversion loan for a Dominion, I can conceive circumstances in which it might, perhaps, be somewhat difficult to arrange the exact terms in reference to the money market and to have the matter hanging over while it was confirmed by the House. There may be some excuse in the case of a Dominion, but I can see none in the case of a foreign country. I very much regret that the Chancellor of the Exchequer has not seen his way to say that, before the guarantee of this country is given to a conversion loan made on behalf of a foreign country, it should first receive the sanction of this House.

10.29 p.m.


I have had an opportunity of discussing with my hon. Friends the best way of meeting the points which they desire to meet in their Amendment, and I have to say that I feel able to accept the Amendment. In regard to the other observations of my hon. Friend who has just spoken, I should like to remind the House that the whole matter is governed by the proviso: Provided that no guarantee shall be given under this section unless the Treasury are satisfied that the substitution of that guarantee for the guarantee of the loan to be redeemed will benefit the Exchequer. That is the governing part of the Clause. Although I have not been able to meet all the points put forward by my hon. Friends I hope they will be satisfied that I have gone some way to meet them.

Amendment agreed to.