HC Deb 04 May 1938 vol 335 cc972-4

Resolution reported, That the power of the Treasury, under Sub-section (1) of Section forty-three of the Finance Act, 1931, to prolong the currency of savings certificates shall cease to be limited as provided in proviso (b) to that Subsection (which limits such prolongation to the thirty-first day of March, nineteen hundred and forty, in the case of certificates issued on or before the thirty-first day of March, nineteen hundred and twenty-two).

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

7.51 p.m.

Sir J. Simon

For hon. Members who desire an explanation of this Resolution I am not certain that reading it will make it reasonably intelligible, but I think I can explain it in a way which I hope will make it clear to everyone. The object of the Resolution is to authorise the Treasury to extend the first issue of savings certificates, the original issue, beyond their present final date which, as things stand, is 31st March, 1940 They must be brought in and encashed by that date. The first issue of these certificates was on sale from February, 1916, to March, 1922, at the price of 15s. 6d. They were to be worth £1 after five years and 26s. after 10 years, and their value thereafter was to increase at the rate of 1s. per year. Certificates of the first issue still in existence are now worth between 32s. or just over 38s., according as they were taken out in 1916 or 1922. As the matter now stands they have their final date in March, 1940.

Some years ago, in a previous Finance Act, that of 1931, the Treasury were given leave to extend the final dates of saving certificates, but it was applied only to later issues. The final date of this original issue was retained for the reason that at that time it was supposed that by 1940 the amount of the first issue would be a very small matter indeed; they would have worked themselves out and the issue could be finally wound up and disposed of. In fact, the popularity of this issue is such that the certificates have not been brought in and encashed as might have been expected, and the amount outstanding, including the accrued interest, is still the equivalent of over £45,000,000. It will probably be £40,000,000 in 1940. It appears to us that, having given the facility of extension to the other issues, it would not be advisable to force redemption of this issue for so large an amount. A good many of the holders want to keep them, and would not by any means be averse to a further extension, which is clearly desirable. What I now ask is for authority by this Resolution to introduce a Clause into the Finance Bill. When hon. Members see the Clause they can consider it at their leisure.

7.55 P.m.

Mr. Benson

May I ask why these Resolutions were not printed with the other Resolutions? These proposals were foreshadowed in the Budget speech of the right hon. Gentleman.

Sir J. Simon

I think they stand in a different position from the Resolutions which were reported to the House from the Committee of Ways and Means, which are the Resolutions upon which the Finance Bill is founded. Is that not so, Sir?

Mr. Speaker

The two Resolutions we have been considering are upon the Paper for their Report stage.

Mr. David Adams

What is the prospective duration of the extended time?

Sir J. Simon

I am not asking that the Resolution should limit it. That is a matter for consideration in the Bill. What I was proposing to do was to remove the present limit which says that, Willy-nilly, they must all come to an end in 1940.

Mr. Alexander

Is not the whole point whether it is best to force that compulsory conversion in 1940 or to leave things as they are? If the interest now remains at 1s. it is believed that people would like it to continue.

Sir J. Simon

indicated assent.