§ Sir Peter BlakerTo ask the Chancellor of the Exchequer if he will list in relation to each of the national savings products the criteria he uses in assessing their quality of funding.
§ Mr. Norman LamontThe authorities need to ensure that funding is not concentrated in liquid short-term debt since such debt has many of the attributes of money. Debt which can be readily converted into cash to finance private sector consumption could have the same financial effects as printing money to meet the public sector borrowing requirement. Moreover, the authorities do not want to run the risk of unexpectedly having to repay a substantial amount of debt at very short notice. Thus, almost all national savings products either require a period of notice before withdrawal or impose a significant financial penally for premature withdrawals to encourage long-term holdings.