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

It is only Ways and Means Advances from the Banking Department. As the hon. Member for Leigh (Mr. Tinker) pointed out in his speech, last year he persuaded the Committee to change the figure in this Subsection, which is a common form of Clause and which exists in all Consolidated Fund Bills, from 5 to 3 per cent. That figure of 5 per cent. had been in Consolidated Fund Bills for 71 years. As it bore no relationship at all to what in fact is the cost of these Ways and Means Advances, my right hon. Friend accepted that in the circumstances of to-day 3 per cent. was perhaps a tidier sum for the reason that it is the maximum at which we have been borrowing on long and medium terms, and therefore, it was most unlikely ever to be reached for this type of borrowing. The limitation has not been effective, and there is no reason to suppose that it will be. The hon. Member says that as 3 per cent. is not reached, why not change it to 2? I would answer that by saying that 3 per cent., because it is the maximum figure for other borrowing, is a reasonable figure to insert here. No one expects it to be reached.

On the other hand, it is reasonable to think that in Consolidated Fund Bills, which come before us regularly year by year—in war-time we have to take them more frequently; in peace-time it is usual to have two each year, one to cover the main Estimates and the other to cover the Supplementary Estimates—the Committee should agree that a figure like this should be stereotyped for a number of years. Certainly there is no point in changing it from time to time. Indeed, it would be difficult to say at any particular moment in normal times, to forecast ahead, whether it might or might not be desirable that the figure should be changed. In point of fact it is not reached at the present time, but it seems better that we should let it stand as it is now and not change it. There are certain disadvantages in constantly chopping and changing these figures in formal Bills of this kind; and, as I have explained, we are not borrowing at anything like that rate, nor are we likely to. The Noble Lord asked whether we could have, at some stage or other, a discussion on the general borrowing policy of the Government—short, medium, and long. I can only put the Noble Lord's point to my right hon. and learned Friend the Leader of the House. I am neither the Chancellor nor the Leader of the House. I cannot explain the matter now, but I can well believe that there would be some advantage in having some of these matters discussed, although I would point out that we are not far distant from the time when the Budget was opened, and when it was possible to discuss these matters.