§ LORD BANBURY OF SOUTHAM had given Notice to ask His Majesty's Government whether there is any precedent for allotting a portion of a Government loan at a less price than that at which it is allotted to the public; whether the Government are of opinion that British credit is not good enough to make the issue of a 5 per cent. loan at 100 a success; and to move for Papers.
§ The noble Lord said: My Lords, I think it is admitted that His Majesty's Government did allot £30,000,000 of the new loan, I believe at 99½ instead of 100, to certain favoured individuals. By so doing they spent £150,000 of the taxpayers' money without, so far as I can see, gaining any advantage of any kind, and they started a new precedent altogether. I do not believe that His Majesty's Government can inform me that on any previous occasion anything of a like nature has been done. I understand that in another place the Chancellor of the Exchequer stated that it was not underwriting. No, it is not underwriting. It is much worse than underwriting. Let me point out the difference between allotting at a lower price than that at which a loan is allotted to the public and underwriting. When a man underwrites a loan he agrees for a certain commission to take a certain portion of that loan provided it is not taken by the public, and therefore 602 the public are in no way damnified because they have an opportunity of taking the whole of the loan. In this case certain people not only agree to take a portion of the loan, but are actually given a portion of the loan, thus putting the public in a disadvantageous position.
§ Let me point out the difference. I underwrite £50,000 of a loan. That loan is a success and all I get is my commission. If it is allotted to me, I not only get my commission but I get the premium at which the new loan stands; therefore I get a double advantage. Moreover, as I know before the allotment is made that I am going to have £50,000 there is nothing to prevent my going and selling it at a lower price than anybody else. I do not know whether that has been done. But there is nothing to prevent a person who has an allotment going at once and selling it at a lower price than the public are asked, if he can get anybody to buy. I think your Lordships will agree with me that in financial matters His Majesty's Government should be above reproach. Supposing a private company had done what the Government have done. They would have laid themselves open to an action at law. I have looked at the Companies Act and I find that everything must be disclosed in the prospectus. This was not and nobody knew anything about it until afterwards. The Government were therefore taking advantage of their position to do something which, if a private individual had done it, would have rendered him liable to be sued in His Majesty's Courts.
§ I have read that the Chancellor of the Exchequer said that he could not help it, and that he could not put it in the prospectus because he could not offer the allotment until after the prospectus was issued. What an extraordinary thing! In all my experience I have never known of underwriting carried out after the prospectus was issued. Suppose I issue a loan and wish to underwrite it and I ask Lord Parmoor to underwrite a certain portion for a certain commission. He does not know how the public are going to receive that loan because the prospectus is not issued, and therefore he takes a certain amount of risk. But if I ask him after the prospectus is issued, he knows from the newspapers or from inquiries in the City how the loan is going to be received, and he either says 603 "Yes I will take it" or he says "No I will not take it because the loan is going to be a failure." Therefore in every way the Government have acted in a manner which, as I have said before, would be the cause of a private person being sued in a Court of Law.
§ With regard to the remaining part of my question, "whether the Government are of opinion that British credit is not good enough to make the issue of a 5 per cent. loan at 100 a success, "why, if they were of opinion that a 5 per cent. British loan was going to be a success, did they waste £150,000 of the taxpayers' money? I dismiss at once any idea that there was anything wrong. It was an error of judgment, and nothing more; but, if that is so, and I have no doubt it is, then there must have been some reason for giving away this £150,000. The only reason I can think of is that the Government were afraid that the loan would not be a success. Just think, a 5 per cent. British loan at 100! Why, not so long ago a 2½ per cent. British loan stood at 114. That was in 1896, and even shortly before the War—I do not know the exact price—2½ per cent. Consols stood at something between 99 and 100.
§ LORD ARNOLDOh, no. About 75.
§ LORD BANBURY OF SOUTHAMI think the noble Lord is mistaken. I never remember any price like that. His Majesty's Government must have been of opinion that this loan was not going to be a success. As a matter of fact it was a great success, and that £150,000 might have been saved. There may have been a reason behind it. I am inclined to think that there was a reason, and that that reason was that the Government were so afraid of the effect of their legislation, and of their extravagance, that knowing a considerable portion of Treasury bonds are due to fall in next year and later, they thought they had better get some money while they could before people find out the position in which the Government's financial proposals would put this country.
I hope your Lordships will excuse me if for one moment I draw your attention to the financial position of the country. Before the War the total Debt of the country was £661,000,000, and the sum required to pay interest on that, and to provide a Sinking Fund, was somewhere 604 about £26,000,000 a year or rather less. See what is the position now. The total Debt is £7,500,000,000, or about twelve times what it was in 1914. The amount required for the service of the Debt, including the Sinking Fund, is £350,000,000 as against £26,000,000 in 1914. Those are stupendous figures. It is not surprising if people, adding up those figures, are rather doubtful whether they will be able to secure the success of a loan. Let me now see the way in which these enormous figures are met. When I first went into the House of Commons the total of the annual Budget was about £100,000,000, and, as far as I remember, that included the Post Office. Last year the amount estimated for the Expenditure of the country, excluding the Post Office and the Road Fund, was £742,000,000. That is eight times the Expenditure that the country had to provide for when I first went into Parliament, and it is four times what the country had to provide in 1914. How is this immense sum found? Income Tax accounts for £239,000,000, Super-Tax £58,000,000, Estate Duty £81,000,000, or nearly £380,000,000 in all. £380,000,000 out of £742,000,000 are found by the small class who pay Income Tax, Super-Tax and Estate Duty. I have not been able to check the next figures, but I believe I am correct in saying that only 95,000 people pay Super-Tax, and 2,500,000 out of 45,000,000 inhabitants of the country pay Income Tax. There is a certain number of people who, allowing for insurance against Death Duties, are already paying half their income in taxation.
In these circumstances it is not surprising that, as the Government have in contemplation further expenditure, they were rather doubtful about the success of their loan. I understand from what I read that further expenditure is already sanctioned of about £18,000,000. That is annual expenditure. In addition to that there is a sum of about £40,000,000 non-recurring expenditure, which is to be taken for providing various works which I understand have been thought out by Mr. Thomas. Then I understand it is arranged that the school age shall be raised. What is that going to cost? These are only the beginnings of the expenditure with which we are threatened. I do not say that my own Party are altogether free from blame. I have never endeavoured to shield my own Party 605 when I thought they were wrong, and I regret very much that when they had the opportunity they did not economise. But that is no excuse for the Government, who in their own estimation are far superior to the late Government, and who ought to set an example of the way in which the country should be managed.
May I draw attention to a very interesting paper, No. 101, issued from the Treasury on April 29 of this year? It shows that the public social services in 1928, the latest available year, cost £332,689,403; in 1901—only twenty-seven years earlier—the amount was £31,707,000. That is more than ten times as much spent on social services last year as was spent in 1901, and yet the Government are going to add to this amount. I am sorry that no abler person than myself has drawn your Lordships' attention to this matter, but I am quite certain—and I am not sure that my noble friends below me will agree with this—that the more we go on with these so-called social services, which merely mean taking from the hard working man that which he has earned and giving to the lazy fellow that which he has not earned, the more sure is it that we shall become a nation of idlers, and that we shall sink to the state of the Roman Republic, which cared for nothing but bread and circuses. I beg to move.
§ THE PAYMASTER-GENERAL (LORD ARNOLD)My Lords, the noble Lord in the course of his observations wandered far afield from the Questions on the Paper. I make, no complaint of that because I shall be very glad to say something about his remarks before I sit down. It is my duty in the first place to reply specifically to the Questions on the Paper. The answer to the first Question is in the affirmative. There are precedents for placing firm part of a new issue. There are also, of course, numerous precedents for underwriting Government loans. What puzzles me is whether the noble Lord is trying to establish that there is some vital difference in principle between placing firm and underwriting.
§ LORD BANBURY OF SOUTHAMHear, hear.
§ LORD ARNOLDIf that is so I suggest to the noble Lord that he is embarking upon a proposition which he will find it extremely difficult to sustain. I quite agree that the more customary form of 606 procedure of insurance—because that is what it is—is by way of underwriting; but the other method of placing firm is a fully recognised one, frequently resorted to by the best financial houses, in respect of the best issues, and there is no real difference in principle between the two methods. Therefore, even if in this matter the Government had established an entirely new precedent—which they have not—by placing firm instead of underwriting, I really am unable to see where the scope for criticism, such as that in which the noble Lord has indulged, arises.
The nature of the transaction has already been announced and explained in another place. Contracts were placed for the guarantee of subscriptions for this loan in cash amounting to £30,000,000 sterling. The object was to cover the maturity of £30,000,000 of Exchequer bonds and Treasury bonds falling due in January and February next. The consideration was a commission of one-half per cent. which was paid for the service rendered in giving the advanced guarantee. It has been announced that the total cash proceeds of this loan—it is apart from sums converted from them 5½ per cent. Treasury bonds due next May because, as your Lordships remember, they also could be converted into this loan—amount to £154,000,000. If the Government had underwritten that amount of £154,000,000 at one per cent. which is the amount which precedents suggest would have been about the rate, the cost would have been very much greater, immeasurably greater than the modest sum which was expended as an insurance for a limited but urgent need. If the Government had done what I have just now been indicating the cost would have been over one and a half million pounds instead of being in all, as it has been, about £170,000.
§ LORD BANBURY OF SOUTHAMBut why should they have done it?
§ LORD ARNOLDIf the noble Lord will permit me to make my speech, I will come to every point before I sit down. I really cannot say everything all at once. The nature of the need has been explained more than once. I have already referred to this maturity of £30,000,000 falling due as early as January and February next. In the second place, money was required to strengthen 607 the position of the Exchequer against a large maturity, which I have already referred to, of £130,000,000 of 5½ per cent. Treasury bonds falling due next May. Beyond this, it was the object of the Government to curtail the volume of Treasury Bills. I would inform the noble Lord that the outstanding amount of these bills had been gradually increased about a year ago owing to the partial failure of the conversion scheme of the then Government in November of last year. The placing of this firm contract, to which the noble Lord takes such exception, of £30,000,000 covered only early maturities due somewhere about two months hence of the £30,000,000 of Treasury and Exchequer bonds of which I have spoken. For the remaining objects, important but less immediate, the Government relied upon the subscriptions of the public at large, and I submit that the results of the loan which have been announced, and I refer to them here, prove conclusively that the confidence of the Government was not misplaced. £154,000,000 was subscribed in cash. £79,000,000 was applied for for conversion of the 5½ per cent. bonds due next May, the amount of which was £130,000,000.
I have not by any means finished with the first part of the noble Lord's Question, but I think it is a little more convenient to pass on at once to the second part, which is—
whether the Government are of opinion that British credit is not good enough to make the issue of a 5 per cent. loan at 100 a success.The reply to that is in the negative. His Majesty's Government are fully of opinion that British credit is good enough, to use the noble Lord's own not very elegant but very expressive words. We say that British credit is good enough to secure a loan at 5 per cent. interest, and our view of that matter has proved to be abundantly correct because of the success of the loan. But of course, the point which the noble Lord has in mind is this. He asks whether it was necessary to place £30,000,000 of the loan firm at a commission of one-half per cent. That is what he has in mind, and that is pretty much the same point as I have been dealing with in the first part of his Question. I confess I am somewhat surprised at this Question coming from the noble Lord who, after all, has had 608 a long experience in the City and is well acquainted with many of these matters. He knows perfectly well that again and again issues of the very first class, about the success of which those concerned and their advisers are absolutely confident, are nevertheless either underwritten or as to a portion of them placed firm.
§ LORD BANBURY OF SOUTHAMI do not agree to the last.
§ LORD ARNOLDAll I would say to the noble Lord about that is that I think City opinion would agree with what I have said, and that City experience would prove what I have said to be true. As I say, the issue may be of an unimpeachable character but, as a precautionary measure, as an insurance, again and again—I do not say in every case, but again and again—the very best issues are underwritten or some portion of them is placed firm, which is merely another form of insurance. That was precisely the position of His Majesty's Government in this matter. It was essential beyond any possibility of mishap to ensure the subscription of £30,000,000. The noble Lord will not disagree with me when I say that these are very unsettled times financially. These present days which we are in are very unsettled times. We have just had one of the greatest falls in Stock Exchange values in New York that has ever taken place there, if not the greatest.
§ LORD BANBURY OF SOUTHAMIt is a bad time to put a loan out.
§ LORD ARNOLDIn those circumstances, no man living could say with absolute certainty that, as a result of the situation in New York and its repercussions elsewhere, something might not have occurred which might have upset, quite temporarily of course, the subscriptions even to a 5 per cent. loan of the British Government. In those circumstances the Government was acting with ordinary business prudence in making an insurance so that, beyond any possibility of doubt, the sum of £30,000,000 should be subscribed. In the course of his observations the noble Lord suggested that there was some grievance because £30,000,000 of the loan, having been placed in this way, would not be available for the public. But I would point out to him that there was no limit placed 609 by the Treasury upon the amount of this loan in the prospectus and, therefore, I think that point falls to the ground. He also spoke very strongly about the fact that the arrangement was not alluded to in the prospectus.
§ LORD BANBURY OF SOUTHAMHear, hear.
§ LORD ARNOLDHe said that if a company had done this they would have been subject to an action at law. What I have to say about that is that I am advised that the company law does not apply to Government loans or to prospectuses for Government loans. The noble Lord talks about this being a waste of the taxpayers' money. I will come to that in a moment and I will ask him a question in regard to something in which I wanted his support, a transaction not altogether dissimilar, two or three years ago. There was no waste of the taxpayers' money at all. It was, as I say, a prudent insurance carried out, having regard to the ordinary cost of these matters, on cheap terms. The noble Lord suggested that 5 per cent. was a high rate to pay for the loan. We have to deal with things as they are. At any rate, I will say this for Labour finance, about which he chooses to be so critical, that this is the only loan since a Labour Government was in office before which has been placed at par and has not been placed at a discount. It is the only loan—
§ LORD BANBURY OF SOUTHAMIn 5 per cents.
§ LORD ARNOLDI do not mind. It is placed at par not at a discount. My noble friend is quite familiar with that point. He knows perfectly well what I mean. A loan like this makes no addition to the nominal value of the Debt. The noble Lord talks about the amount of the Debt. He seems to overlook the fact that as regards the late Government they were constantly adding to the nominal amount of the Debt by the way in which they made issues. This loan does not do it. Unlike the 4 per cents. and still more unlike the 3¾ per cents., it provides no prospect of capital appreciation more than from the ordinary incidence of Income Tax and Super-Tax.
The noble Lord says the rate of interest is high. The answer to that is 610 at least two fold. In the first place the loan is not a long loan in any strict sense of that term. It is repayable at the option of the. Government in 1944, and that is three years short of the currency of the existing 5 per cent. loan. Moreover, the Government is not immune—no Government is immune—from the ordinary economics of borrowing. The rate at which money can be borrowed depends upon the conditions of the time, and those conditions have been difficult and unpropitious—the noble Lord will not deny that—and the rate to-day is not necessarily, nor even probably, the rate next time. The impending commitments were such that it was impossible in common prudence to wait, and, given the conditions in which it was necessary to borrow, it cannot reasonably be contended that the type of loan chosen or the manner of its issue places any unnecessary burden upon the State.
There were one or two suggestions in the Question and in the speech of the noble Lord which have surprised me very much. I have in mind the difference between his attitude to-day and his attitude in 1925 in regard to another commission—a commission which was to paid to Messrs. Morgan & Co., of New York, by the British Government for certain arrangements in connection with the return to the gold standard. The noble Lord will say that is not analogous, but I would remind him that I am on the point of commission and what the noble Lord was pleased to call a waste of taxpayers' money. What happened at that time? I know the noble Lord has a great reputation for consistency, but I say that in this matter he has not been consistent. I tried to enlist his support then when I was speaking against this arrangement and I was quite unsuccessful in doing so. What were the facts? An arrangement was made by the late Government in 1925 whereby merely for the call of £20,000,000 if the money should be required, a commission of 1¼ per cent. for two years was to be paid and was paid. That amounted to £500,000 sterling and not £170,000—half a million pounds sterling merely for the call of money if it should be required. I said at the time that that was a very high rate of commission to pay for any such arrangement, and that in all probability, if the money had come to be required, it could have been got with- 611 out any such commission at all. The late Government, as an insurance, paid that amount of £500,000 merely for the call of money which in the event was not required. Therefore all the British taxpayer got for his £500,000 was an insurance.
§ LORD BANBURY OF SOUTHAMI do not remember the matter. I presume it had something to do with the gold standard, a totally different thing.
§ LORD ARNOLDI have already said it was a different thing, but it was a commission, and the point is quite sufficiently analogous to bring forward in connection with some of the observations of the noble Lord. We are considering a question of insurance and a commission and what a Government should do. I asked the noble Lord then if he would not support me and he did not say that he would. He did not then ask for any precedents. He had nothing to say then; yet I say this transaction could have been arranged, if it was to be arranged, on much cheaper terms. Before I sit down I should like to make some observations about the concluding remarks of the noble Lord. I have just had put into my hand—I did not ask for it, but I am much obliged to one of my noble friends who has given it to me—a note showing that the price of Consols in the year 1914, just before the War, was 74⅞ to 75. You cannot have it nearer 75 than that, and that is what I said. The noble Lord said it was 99.
§ LORD BANBURY OF SOUTHAMI said somewhere between 90 and 100.
§ LORD ARNOLDThere is a wide difference between that and 75. I hope I have made that point clear. Then the noble Lord said that the National Debt before the War was £661,000,000. I believe it was £651,000,000. There is not much difference there. His general contention was that when he first came into Parliament—I am afraid that was a very long time ago—the Budget amounted to about £100,000,000. He was not quite sure whether that included the Post Office or not, but he rather thought that it did not. This last year, he said, excluding the Post Office and non-tax-revenue expenditure, if I may so put it, the Expenditure was £742,000,000. The noble Lord said: "Look at the contrast." Part of the reply to that, and a very 612 substantial part of the reply, is this, that included in the £742,000,000 is £360,000,000, as he himself said, for National Debt interest and Sinking Fund and of that amount about £300,000,000 goes to persons living in this country. It is an internal Debt.
The noble Lord quotes the figures of Income Tax and Super-Tax, which he said came to £297,000,000; but the point is this, that this £300,000,000, which is the share of the £360,000,000 which goes to persons living in this country—or very much the major portion of it—goes in one way or another directly or indirectly to those very persons who are paying Income Tax and Super-Tax and therefore, looked at in that way, the Income Tax and Super-Tax which they are paying is paid back to them in Debt interest and a email amount for Sinking Fund. Therefore, that cannot be regarded as an increase in Expenditure in the ordinary sense of the term. It is not so. I have explained the position, and, deducting the amount I have named, Expenditure is down to £442,000,000 as against £100,000,000. There may be the Post Office, I admit, to come into the question, but it would not amount to a great deal in these days.
As I say, it is a long time since the noble Lord came to Parliament. The National income was very much smaller then. I have no hesitation in saying that since then the National income has grown a great deal. I think it has probably trebled, but certainly it has more than doubled, because it has doubled since about 1914. Taking that into account there is no tremendous disparity between these figures and I think the noble Lord's apprehensions are really unduly pressed. He spoke about the Income Tax payers, suggesting they numbered 1,500,000—
§ LORD BANBURY OF SOUTHAM2,500,000.
§ LORD ARNOLDI am glad to hear that because it is nearer the mark. It is not quite that, but it is not far from 2,500,000. He went into the whole question of social services and their cost. I suppose we shall have that matter up again in a few days upon the Widows' Pensions Bill, and I do not think I will pursue the point any further at this moment, though I shall be very pleased to deal with it on what I think will 613 be a much more appropriate occasion than the present. I am not in the least complaining about the noble Lord's observations, because I consider the Government are in a very strong position to reply to them. What I would say on the Question, to which I have replied I think fully and fairly, is that the action of the Government throughout in difficult circumstances—circumstances not of their own creation—has been perfectly proper. I emphasise that point—circumstances not of their own creation.
I see the noble Marquess [the Marquess of Salisbury] is in his place now. He was taunting us yesterday saying we had not done this and that and the other. We cannot put everything right in five minutes. We cannot put right in five minutes the wrongs which have been done in five years. The financial position in which this loan had to be made has been, at any rate in part, as I have explained to your Lordships, produced by the partial failure of the conversion scheme of the late Chancellor of the Exchequer in November of last year. We had to meet that and deal with it. It was not our fault, and I think my right hon. friend the Chancellor of the Exchequer, so far from being in any way censured for having insured £30,000,000 of it, is to be congratulated on the success of the loan. His action was prudent and businesslike having regard to what is usually paid for such insurance. I say again there is no difference in principle between what was done by the Chancellor of the Exchequer and underwriting. The only real difference is that the method which he adopted was more appropriate to a loan without a definite limit, and also, as I have shown, it is a method which is much cheaper than underwriting and will save the taxpayer money.
§ LORD BANBURY OF SOUTHAMMay I ask the noble Lord before he sits down if he can give one instance where a Government loan has been allotted in part for less than the public are asked to subscribe? He said there were precedents, but he did not give one.
§ LORD ARNOLDThe Chancellor of the Exchequer referred to this in another place. In 1901 and 1902 there was a loan of about £5,000,000 placed at a commission.
§ LORD BANBURY OF SOUTHAMThe Chancellor of the Exchequer said in another place that a Government loan had not been either underwritten or allotted at a discount.
§ LORD ARNOLDOn the contrary. The noble Lord is not correct there, if I may be allowed to say so. I have the words of the Chancellor of the Exchequer. He said—
There are also some precedents dating back to 1901 and 1902 for placing part of a new issue firm.Those are his own words.
§ LORD DANESFORTMy Lords, to the ordinary lay mind, unencumbered by a great variety of figures which probably are difficult to follow, the real question is: What is the necessity for issuing £30,000,000 of this new loan at a discount of one-half per cent.? The noble Lord who has spoken has made two very remarkable admissions in connection with that question. He said first in answer to the Question on the Paper that British credit is good enough to make the issue of a 5 per cent. loan at 100 a success. If British credit is good enough to make the issue of a 5 per cent. loan at 100 a success, what was the necessity of issuing it at 99½? The two things appear to me directly in contradiction. But let me put a further point to the noble Lord. He told us that they had to raise £130,000,000 to pay bonds and other obligations which were maturing in June of next year. I think that is the figure he gave. It was not found necessary, and the Government did not for a moment suggest that it was necessary, to issue this £130,000,000 at a discount. If it was not necessary in order to raise £130,000,000 to issue that at a discount, I want to know, if I may, why it was necessary when you wanted £30,000,000 to issue that at a discount?
The £130,000,000 was wanted in June and the £30,000,000 in January and February, but the Government did not suggest, for a moment, that it was necessary to raise the £130,000,000 by issuing it at a discount. I want to know why, if that is so, it was necessary to raise the £30,000,000 at a discount. That is the way in which it occurs to a very simple, innocent outside mind, and I have not heard one word of explanation of that. I think a great many people in 615 this country will want to hear some further explanation. If any one else is going to speak on the Government Benches I hope he will reconcile the inconsistency of the statements which the noble Lord made. The noble Lord said that British credit is good enough to raise a 5 per cent. loan at 100—that is, at the full nominal value—yet British credit was not good enough to raise £30,000,000 for which we paid £150,000 in order to raise £30,000,000 at a discount of half per cent.
There was one further point in the speech of my noble friend Lord Banbury which the noble Lord has not answered. That is the question of the prospectus—namely, why was this issue of £30,000,000 at a discount of half per cent. not mentioned in the prospectus? If my memory is right—I do not like to say definitely without consulting the books—had this been an ordinary loan by a commercial company it would have been absolutely necessary to mention such a contract in the prospectus. It is a very important matter for investors to consider. If investors were told when a large loan was being issued that a proportion of it would be issued at half per cent. discount, it would have a very material influence on the intending investor, and the law has very properly said that contracts of that sort ought to be mentioned in the prospectus. The noble Lord has not told us why this was not mentioned in the prospectus issued by the Government. I do not know whether the Government are superior to the ordinary law in this matter or not, but perhaps if any noble Lord answers from the Government Bench he will explain the point.
§ LORD BANBURY OF SOUTHAMMy Lords, the noble Lord made rather a point of some commission paid to the firm of Morgan and Company for a call on £20,000,000 some years ago. I am afraid I have no very clear recollection of that particular transaction, but as far as I can remember—the noble Lord will correct me if I am wrong—it was a question as to whether or not the Bank of England should obtain gold from America, all the gold being in America, and in order to obtain that gold, if necessary, a certain commission was paid. That is a totally different thing from 616 issuing a loan to the public in the way the loan was issued a few days ago. Then, as my noble friend Lord Danesfort says, no answer whatever was given to me to explain why, if it is necessary for a private individual or company issuing stock to state the full terms in the prospectus, it is not necessary for the Government to do so. I looked up the Companies Act before I came into the House and I see it states that all underwriting and the commission paid for underwriting must be stated in the prospectus. No answer was given me on that. I suppose the noble Lord did not give an answer because he could not.
§ LORD ARNOLDIf the noble Lord will allow me to say so. I not only was able to give an answer but I did. I told him that according to my advice the Government are not legally under an obligation in their prospectus to make statements that a company has to make.
§ LORD BANBURY OF SOUTHAMWhy should a Government be different to a private individual?
§ LORD BANBURY OF SOUTHAMIf it is right for a private individual surely it is right for the Government, or are the Government going to put themselves in a position to break the law?
§ LORD ARNOLDIt is company law. The Government is not a company.
§ LORD BANBURY OF SOUTHAMA private individual has to do certain things which the Government have not. I leave it at that. As far as regards precedent I understand the noble Lord has read what the Chancellor of the Exchequer said in the House of Commons, but that report was not in the newspapers. The report I saw in the newspapers was that though a certain guaranteed loan had been underwritten no Government loan ever had been underwritten or allotted in that way. I do not know that there are really any Papers. The noble Lord did not say anything on that point. I do not particularly wish to know the name of the underwriters, and so I will not press the Motion.
§ Motion, by leave, withdrawn.