HC Deb 20 July 1936 vol 315 cc7-8
9. Mr. MORGAN JONES

asked the Under-Secretary of State for India whether he can give the House some explanation as to why the Secretary of State for India in Council decided that no action should be taken in the matter of the charges of the Imperial Bank of India for the management of debt; whether his attention has been directed to paragraph 3 of the report of the auditor of Indian home accounts upon the question he raised last year with regard to the management of that portion of the Indian Government rupee debt the interest on which is issued in England; is he aware that certain information in the possession of the bank was withheld from the Government with the result that thousands of pounds of public money which might have been saved were paid to the bank; and why, seeing that the payment of £5,000 in respect of 1933 was placed under audit objection, the Government of India confirmed this payment?

Mr. BUTLER

This matter was most carefully considered, and my Noble Friend is satisfied, after full examination of the facts, that in respect of the holdings of Indian Government rupee debt on the London books, on which the Imperial Bank's remuneration was based, there was no infringement by the Imperial Bank of the agreement. My Noble Friend is further not aware that the bank has withheld from the Government any information which it was under obligation to afford. As regards the confirmation of part of the payment for 1933, the Government of India were influenced by the fact that a temporary withdrawal of the bank's securities from London in that year was effected to meet the convenience of Government who were contemplating a conversion operation.

Mr. JONES

Is the hon. Gentleman aware that while in point of fact the auditor in his report says that there has been no infringement of any sort, he does in set terms say that this Imperial Bank did handicap the Government by withholding information?

Mr. BUTLER

The auditor said that there was no infringement of the actual terms of the agreement.

Mr. JONES

Am I not right in saying that, according to the report of the auditor in question, the withholding of this information by the Imperial Bank of India did in fact mulct the Government in a loss of thousands of pounds per year, and does he consider that the Secretary of State was justified in setting aside the auditor's report and in confirming the action of the bank as he did?

Mr. BUTLER

In the case of 1933, it was to meet the convenience of the Government, but in general I think the hon. Gentleman has a point, in that the original contract did not provide for the sort of contingency which has occurred.

Mr. JONES

May I press this point? The hon. Gentleman says that the auditor states that there was no infringement, and I admit that, but may I remind the hon. Gentleman—[HON. MEMBERS: "Speech!"] Then may I give notice, Mr. Speaker, that I will raise this matter on the Adjournment at the earliest possible moment?