HC Deb 13 February 1940 vol 357 cc588-9
Mr. Pethick-Lawrence (by Private Notice)

asked the Chancellor of the Exchequer whether he has any statement to make about the result of the recent conversion operation?

Sir J. Simon

Yes, Sir. The House will be interested to learn what has been the approximate result of the offer which I announced on 17th January of a new loan carrying interest at 2 per cent. by way of conversion of the existing £350,000,000 outstanding of the 4½ per cent. Conversion Loan 1940–44. The House will recall that I decided to take the earliest opportunity to repay the4½per cent. loan; the day of repayment was therefore fixed as 1st July next. The offer was either to repay on 1st July in cash or, if the holders preferred it, to give them the new Conversion Loan at par, and the option expired on 8th February. I am now able to state that actual applications for conversion amounted to £236,000,000, and for repayment to £99,000,000. There remains a balance of £15,000,000, about which, for various reasons, full particulars are not yet available or in which special consideration may have to be given on account of difficulty in exercising the option in the time allowed.

The House will see, therefore, that already the total proportion converted exceeds two-thirds of the whole issue of £350,000,000, and I regard this result as extremely satisfactory. It is obvious from the figures that a very high proportion indeed of the holdings of financial institutions were converted, as well as a substantial part of those of private persons. The House will remember that in announcing the conversion offer I said that in the case of the small holder who had not yet taken up his full quota of National Savings Certificates and Defence Bonds there could be no objection if he preferred to take his money for that purpose, and I expressed the hope that no one would opt for repayment except for the purpose of relending the money to the Government. That suggestion still stands.

Sir I. Albery

May I ask whether on this occasion some credit is not due to the financial circles in the city of London?

Sir J. Simon

I am not saying for a moment that these things spring unaided out of the brain of the Chancellor of the Exchequer. There has been co-operation which in the circumstances has been very fruitful.

Mr. Gallacher

Have not the financial circles in the city of London made a statement themselves that they are getting full compensation for the reduction in the increase they are getting as a result of the agreement in regard to the railways?