Clause 2. — (Power for the Treasury to borrow.)

Part of the debate – in the House of Commons on 5th August 1942.

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Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

I beg to move, in page 2, line 10, to leave out "three" and to insert "two."

I do not want to detain the Committee long in moving the Amendment which stands in my name and in the name of my hon. Friend the Member for Leigh (Mr. Tinker). We have put down this Amendment partly to call attention to the wrongful way, in our view, in which the war is being financed, and partly in an endeavour to persuade the Chancellor to alter the rate of interest which is stated in Clause 2 (3) by reducing the percentage to be paid from 3 per cent. to 2 per cent. I know I should not be in Order in wandering over the whole field of how money should be raised, but we do wish to point out that the Government have power to take over the lives and property of everybody, and we submit that the way in which the war is at present being financed allows the moneylenders to profiteer and nobody else.

It appears to us that the whole method is wrong, and the Chancellor would do well to take into consideration what we have to say. I would like to point out that at present the Chancellor, under this Clause, borrows by Treasury bills, but there is no arrangement which prevents the banks from converting the money, when repaid or at some future date, into War Loan or some other loan at a higher rate of interest. Our submission is that the right way to finance this war is by interest-free money, and we would have preferred to have moved a Clause to that effect.