HC Deb 26 November 1946 vol 430 cc1415-7
59. Mr. Nigel Birch

asked the Chancellor of the Exchequer why L.P.T.B. 3 per cent. Guaranteed Stock (1967–72) has been included in the schedule of transport stocks to be taken over under the transport nationalisation scheme, in view of the fact that this stock is guaranteed by His Majesty's Government and under the terms of issue is not redeemable until 1967.

66. Sir J. Mellor

asked the Chancellor of the Exchequer whether he will give an assurance that the Government will respect and implement the guarantee by the Treasury of the principal of, and the interest on, the L.P;T.B.'s three per cent. Guaranteed Stock, 1967–72.

69. Captain Crowder

asked the Chancellor of the Exchequer if he will make a statement on the taking over of railway stock, as regards the L.P.T.B. 3 per cent. Guaranteed Stock (1967–1972) which carries specific contractual obligations.

Mr. Dalton

The guarantee is against default on the stock by the Board. No question of implementing the guarantee arises; if Parliament provides for the compulsory acquisition of the stock and the issue of compensation to the present owners.

Mr. Birch

Is the right hon. Gentleman aware that up till now Government guaranteed stocks have been dealt in on the basis that their security was exactly the same as direct Government obligations, and are we to take it that this is a precedent for similar behaviour on other Government stocks and other Government guaranteed stocks?

Mr. Dalton

I am anxious to make this as clear as I can. As I understand it, and as I am advised by my legal advisers, the point is that this is a guarantee that this stock will not be defaulted on by the Board. In the event of the Board being unable to pay the necessary revenue the Government would stand behind the Board. That does not touch the general question, which I regard as unchallengeable, of the right of the Government at any time to acquire by Act of Parliament any form of private property anywhere on payment of compensation. It could be debated whether the terms of the compensation were reasonable or not, but the right of the Government to acquire, in my view, is quite unchallengeable.

Mr. Oliver Stanley

Does not this particular stock, from the point of view of compensation, stand on quite a different footing from the other railway stocks that have been taken over, because here, owing to the guarantee, there was no element of risk which there must always be in any private stock? Therefore, should not this be treated exceptionally from the point of view of compensation?

Mr. Dalton

I should judge that the Stock Exchange quotation would reflect the fact to which the right hon. Gentleman has referred. The stock was, in fact, quoted at the date chosen for the assessment of compensation at 107 7 8ths, and that price reflects the fact that there was a guarantee behind the stock.

Sir J. Mellon

In view of the Chancellor's reply, does not the Treasury guarantee of this stock appear to be just another meaningless symbol?

Mr. Dalton

No, Sir.

Major Cecil Poole

But is it not a fact that all the main line railway companies have guaranteed stocks?

Mr. Dalton

Not quite—do not let us be confused—in the same legal and explicit sense as this stock. As a matter of fact, a lot of the stocks of the railways have failed to pay a dividend from time to time.

Captain Crowder

Will the Chancellor of the Exchequer bear in mind that, as this stock is guaranteed as to both principal and interest, naturally the trustees would think that they would be able to draw 3 per cent. until at least 1967 for their beneficiaries, and is it not putting the trustees who took up this stock in a very awkward position? Will the right hon. Gentleman consider it again?

Mr. Dalton

All these matters will, of course, be open to debate when the Transport Bill is introduced, but I have given an answer on the legal question to which I think the hon. Gentleman who put down the Question was directing his mind.

Captain Crookshank

Does that mean that these figures will be inserted in the Bill and will therefore be discussable?

Mr. Dalton

I cannot commit myself on the text of the Bill.