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 Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

I hesitate to intervene too soon, but it is clear from what has been said that Members who have spoken on this Amendment are under a complete misapprehension as to what the Sub-section deals with. It has nothing to do with medium or long-term borrowing. It has nothing to do with War Loans or War Bonds or Savings Bonds, because these are raised under the National Loans Acts, not under this Bill at all. Therefore, while I appreciate the skill with which the hon. Member for Ipswich (Mr. Stokes) raised the issue which is always at the back of his mind, I cannot go out of Order in replying to it. What this Sub-section refers to are what are known as the Ways and Means Advances, which are day-to-day borrowings. As a matter of fact a large number of our Ways and Means Advances represent the idle balances which are in the hands of other Government Departments, that is, inter-Departmental borrowing, and lending which, of course, does not cost anything at all. It is only common sense that money should be used if available in any Department and then put back again. There is no expense there at all.

The only part on which there can be any argument at all is the case of advances by the Banking Department of the Bank of England on this very short-term basis. A reply was given to my hon. Friend the Member for East Stirling (Mr. Woodbum) on 16th January, 1940, when he asked what were the rates payable. The reply was: The present rate of interest payable on Ways and Means Advances from the Banking Department of the Bank of England is ½per cent. per annum. If exceptionally large amounts are borrowed, the payments on the excess amounts would be higher, but not exceeding 1 per cent. per annum."—[OFFICIAL REPORT, 16th January, 1940; col. 20, Vol. 356.] That is what we are talking about. Actually, during the present war advances from the Banking Department have been on quite a small scale. In fact, I can inform hon. Members that during the four months April to July this year the amounts have averaged only£4,000,000 outstanding on any given day. Therefore the hon. Gentleman will see that the theme of his speech was really concerned with an entirely different matter.