§ 61 and 62. Mr. Woodburnasked the Chancellor of the Exchequer (1) whether he is aware that while £104,778,000 was collected by way of National War Bonds between 26th July and 30th August, there 2017 were £32,500,000 Treasury deposits redeemed in the same period; and whether this represents in the main a transfer of bank investments from Treasury deposit lending to National War Bond investment;
(2) what is the per £100 cost to the State of borrowing by means of Treasury deposits and National War Bonds, respectively?
§ The Chancellor of the Exchequer (Sir Kingsley Wood)The answer to the first Question is in the affirmative. Interest is payable at the rate of 1⅜ per cent. per annum on Treasury Deposit Receipts and of 2½ per cent. per annum on National War Bonds. The former have a currency of six months and the latter of roughly 10 years.
§ Mr. WoodburnIs there any reason why there should be this change, which obviously puts an extra burden on the State, and would it not be advisable to keep to one form of borrowing, even if it is for six months at a time?
§ Sir K. WoodNo, Sir. The hon. Member will appreciate that it is also important to get long-term loans of this nature.
§ Mr. LoftusIs not the money invested in Treasury deposits a purely inflationary creation of money, and therefore, should not the charge to the State be only the cost of creation, which is estimated by economists to be 1 per cent.?
§ Sir K. WoodAs the hon. Member knows, I do not take that view.