HC Deb 23 April 1940 vol 360 cc54-6

Before I come to this problem, I must occupy a few minutes in making a short statement to inform the Committee how the National Debt stood at the end of last year. Although the subject is technical, I think it is of interest. We borrowed last year not only to cover that deficit of £768,000,000 which I have just mentioned, but also to find £4,250,000 to make up the balance of the statutory Sinking Funds of £11,250,000; we borrowed also £7,000,000 for issues under the Anglo-Turkish (Armaments Credit) Agreement Act, 1938, the Overseas Trade Guarantee Act, 1939, and the North Atlantic Shipping Act, 1934. In the result the National Debt, which was £8,163,000,000 at the beginning of the year, had increased to £8,931,000,000 on 31stMarch. £569,000,000 of the new borrowing arose by additions to the floating debt; £99,000,000 arose on account of the first proceeds of the £300,000,000 Three per cent. War Loan. As hon. Members will recall, 10 percent. of it was to be paid on application, and there was the alternative to pay up the whole amount at once. Last year we received £99,000,000. The remaining proceeds of the Loan will fall into the accounts of the present financial year.

There is another figure which I must ask the Committee to note. No less a sum than £122,000,000 was received last year from the new Savings Certificates and Defence Bonds—a very striking result for the first four months of the War Savings campaign. Thanks to that campaign, receipts from Savings Certificates and Defence Bonds during the year exceeded the amount of certificates repaid by £109,000,000. Miscellaneous sources of borrowing accounted for nearly £2,000,000, among which I must mention about £400,000 in loans free of interest from a number of public spirited citizens, in both small and large amounts; and £570,000 received under the arrangement by which the Government of Northern Ireland agreed to relend to the Imperial Government 75 per cent. of the proceeds of the sale of Ulster Savings Certificates.

Although it does not enter into the debt figures for 1939–40, I would like to remind the Committee that in February last we made provision for dealing with the 4½ per cent. Conversion Loan 1940–44 which the Treasury gave notice to repay on 1st July next. The amount of that loan outstanding was £350,000,000. Holders were offered the alternatives to convert it into a loan of 2 per cent. or, if preferred, to have their holding repaid. What happened? Of that loan, £245,000,000 will be converted into the 2 per cent. Conversion Loan; £105,000,000 is to be repaid in cash, and as the balance I have just received from the 3 per cent. Loan comes to some £200,000,000, I enter the new financial year, with all its difficulties, with the prospect of nearly £100,000,000 net in hand, as the joint result of the issue of the 3 per cent. Loan and of the 4½ per cent. Conversion operation. Even when we are dealing with these very vast sums, £100,000,000 is something to be considered and when we come to measure and endeavour to meet the burdens of the present year I shall be glad to remind the Committee of this trifle of £100,000,000.