HC Deb 28 November 1949 vol 470 cc767-8
39. Sir J. Mellor

asked the Minister of Fuel and Power why he authorised the substitution of Gas Stock redeemable 1990–95 for securities converted on 21st November, when the market value of short or medium dated stock would have been less distantly related to the market value of corresponding Government securities at the vesting date, 1st May; and whether he will, under regulation 1 (3) of the Gas (Stock) Regulations, 1949, withhold his consent from any further issue of long dated Gas Stock for purposes of compensation.

Mr. Gaitskell

It is a principle of sound finance that public utilities should borrow as long as possible for capital works. Adherence to this principle was particularly desirable in the case of British Gas Stock 1990–95 which was issued as compensation and in replacement of long term or even irredeemable securities of the old undertakings. For the same reason it is regarded as unsound to change over to the issue of a shorter dated stock on conversion dates. The answer to the second part of the Question is accordingly in the negative.

Sir J. Mellor

Does the Minister consider that an injustice for some is an argument in favour of injustice for all; and will he agree that there is no statutory reason why he should not now issue a short-dated stock which would be much fairer to the recipients?

Mr. Gaitskell

The first part of the question seems to be completely irrelevant. As to the second part, there would be no statutory barrier to my arranging for the issue of short-dated stock, but I explained in my original answer why we chose not to do so.

Colonel Clarke

Is the Minister not aware that considerable hardship has accrued to many gas stock holders and co-partners over this matter, and will he not, therefore, further explore the suggestion made by the hon. Baronet, which may in future obviate some of this hardship?

Mr. Gaitskell

The question raised by the hon. Baronet has been carefully considered, and I have given the House my decision on the matter.

Mr. Osborne

Does the right hon. Gentleman think it fair to issue stock which at the time when it was first considered was certified as being issued at par, and which is now worth only 85 to 90? Does he consider it fair to offer stock which is worth only 85?

Mr. Gaitskell

This is in accordance with the Gas Act, 1948.