HC Deb 18 March 1941 vol 370 cc30-1
Mr. Pethick-Lawrence

(by Private Notice) asked the Chancellor of the Exchequer whether he is now prepared to lift the ban on the conversion of stocks issued by local authorities where an option of repayment can be exercised?

Sir K. Wood

Yes, Sir; I think that the time has now come when facilities can be given for these conversions. I am, therefore, prepared to consider applications by the local authorities concerned for permission to give notice of repayment of stocks carrying more than 4 per cent. interest, accompanied by the issue of a conversion offer to stockholders, on terms to be approved by the Treasury. While I hope that existing stockholders will, in the main, accept the offer of conversion, I have, of course, to contemplate that a certain amount of stock will fall to be repaid in cash. In order to reduce to a minimum interference with the Government's borrowing operations, I propose to take power in the Public Works Loans Bill, which will be introduced within a few days, for the Treasury to make loans out of the Local Loans Fund, up to the amount required to repay unconverted stock.

Mr. Garro Jones

Is the minimum rate of interest, 4 per cent., applicable to all local authorities, whatever the rate at which they have been able to borrow? Would it not be practicable to allow some elasticity, in order to bring in the possibility of conversion for those local authorities which have been able to borrow at a much lower rate?

Sir K. Wood

Yes; but I must take the higher-interest loans first, and see how I get on with them.