HC Deb 11 October 1944 vol 403 cc1745-6
42. Sir Percy Harris

asked the Secretary of State for the Colonies why it has been found necessary to introduce in Palestine a draft Bill to enable an issue to be made of premium bonds; whether he can give particulars of same; and whether there is any precedent in any part of the British Empire for raising money in this way.

Colonel Stanley

Having regard to the general financial position and the dangers of inflation, the Palestine Government and His Majesty's Government are anxious to raise in Palestine as much money as possible by local borrowing. After most careful consideration of all methods it was decided that premium bonds would make the strongest appeal to the population of Palestine. It is proposed to issue 100,000 bonds of £10 each. The bonds carry interest of 1 per cent. Premia will be paid quarterly. The first bond drawn each quarter will be redeemed for £1,000 and 158 others will be redeemed for smaller amounts. A premium bond issue was made in Cyprus and India in 1943.

Sir P. Harris

Seeing that the proposal for premium bonds has been turned down repeatedly in this country, may I ask the right hon. and gallant Gentleman why he thinks it advisable to apply this gambling idea to a Mandated Territory, where the people cannot be consulted; and does he think that Palestine should be encouraged to gamble?

Colonel Stanley

The circumstances are entirely different. In Palestine to-day there is an acute danger of inflation through war conditions, and there are not the leisurely circumstances in which this proposal has been considered in this country. A further difference is that, whereas this country is well accustomed to ordinary family savings, so far that has been a failure in Palestine.

Sir Irving Albery

Can my right hon. and gallant Friend give the House any information about the actual rate of interest on these bonds, allowing for the premium paid?

Colonel Stanley

I said "I per cent."

Sir I. Albery

I know, but that does not allow for the premium.

Colonel Stanley

If I can get an actuary, I will have it worked out and send to the hon. Member.