To apply a sum out of the Consolidated Fund to the service of the year ending on the thirty-first day of March, one thousand nine hundred and forty, and to appropriate the further Supplies granted in this Session of Parliament.
Presented, pursuant to the Order of the House this day, by the Chairman of
Ways and Means, the Chancellor of the Exchequer and Captain Crookshank; and ordered to be printed. [Bill 228.]
§ Motion made, and Question proposed, "That the Bill be now read a Second time."
§ 6.57 p.m.
§ Mr. Pethick-Lawrence
I think it is essential that the Chancellor of the Exchequer should say a very few words relating to Clause 2 of this Measure. If no explanation is given there may be considerable misunderstanding as to the precise position. I can quite imagine that there will be a public idea, after reading this Bill, that its intention is to raise money by loan and pay 5 per cent. interest on it. If that impression is to go abroad, I think it will be a very serious misfortune, and it is essential, therefore, that the Chancellor of the Exchequer should explain, quite briefly, what is the intention of the words "or otherwise" in page 2, line 2; what is precisely the financial procedure intended; and, further, what exactly is intended with regard to payment of interest on these Bills. It is essential that the public at large should not be under any misapprehension as to the intention of the Government on this matter.
§ 6.58 p.m.
§ Sir J. Simon
I am obliged to the right hon. Gentleman for asking that it should be stated publicly that Clause 2, which is a technical Clause, should not be regarded outside, or by anybody, as having these large and ill-considered consequences to which he has referred. As he knows, that is not the object of the Clause at all. It is a common-form Clause which gives the Treasury temporary borrowing powers—what are called ways and means borrowing powers—to enable the Treasury to borrow, within the total sum which the House has already approved, in anticipation of revenue or, it may be, in anticipation of medium or long-term borrowing under other Acts. The power is purely temporary, and if hon. Members refer to Sub-sections (2) and (3), they will see that if this borrowing is exercised by the issue of Treasury Bills these Bills must be repaid not later than 31st March, 1940, and if borrowed otherwise than by Treasury Bills for example, in the form of temporary advances from 143 the National Debt Commissioners—the money must be repaid not later than the end of the quarter after that in which it is borrowed. The limitation of 5 per cent. must not be taken and ought not to be taken outside as an indication of a decision or a judgment as to what the ruling rate will be in the larger circumstances. It has always been thought best in the Consolidated Fund Bill to retain this figure of 5 per cent. unchanged—it has always been the practice—rather than to attempt each year to fix a figure which might be expected to be achieved on the actual rates to be paid for the year. Hon. Members will notice that the figure is stated merely as a maximum. I do not think that any further statement is needed from me, but I confirm what the right hon. Gentleman implied in his opening words, that the contents of Clause 2 in this Bill are not of wide and general import which could be taken as giving a guide to the future financial policy, but rather in the nature of temporary powers expressed in common form, which it is necessary to take.
§ Question, "That the Bill be now read a Second time," put, and agreed to.
§ Bill read a Second time; considered in Committee; reported, without Amendment; read the Third Time, and passed.