HC Deb 26 November 1959 vol 614 c553
36. Mr. Webster

asked the Chancellor of the Exchequer whether, in view of the low current price of 3½ per cent. War Loan, he will establish a sinking fund similar to that established for 3½ per cent. Conversion Stock.

Mr. Barber

No, Sir. Not only is this form of redemption not provided for in the terms on which War Loan was issued, but would impose a fairly heavy annual change on the Exchequer without the likelihood of its having an appreciable effect on the market price of the stock in the near future.

Mr. Webster

Would my hon. Friend agree that this type of sinking fund, to re-purchase 1 per cent. of the stock in the open market in any year that the stock stood at a discount of 10 per cent., need not necessarily be a great expense to the taxpayer?

Mr. Barber

I can only say that in his Question my hon. Friend referred to 3½ per cent. Conversion Stock. I think that if a sinking fund on the lines of the one used in that case were employed for 31 per cent. War Loan, the cost in the first year would amount to about £38 million.

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