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Government Of Northern Ireland Loan Guarantee

Volume 155: debated on Friday 16 June 1922

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Considered in Committee, under Standing Order No. 71A.

[Sir EDWIN CORNWALL in the Chair.]

Motion made, and Question proposed,

"That it is expedient to authorise the Treasury to guarantee the payment of the principal of and of the interest on any loans raised by the Government of Northern Ireland, not exceeding in the aggregate an amount sufficient to raise three million five hundred thousand pounds, and to charge on the Consolidated Fund any moneys required to fulfil such guarantee."—[King's Recommendation signified.]—[Sir J. Baird.]

The objects of the Bill which will be based upon this Resolution are clearly set forth in the Memorandum which has been issued. The main point which will be of interest, from the financial point of view at any rate, is that it is not anticipated that any charge will fall upon the Imperial Exchequer in re- spect of the guarantee which it is proposed to give. The sum is £3,500,000, and we ask the House to guarantee a loan which will be raised by the Government of Northern Ireland for the purposes set forth in the Memorandum, namely, for public works such as are in Great Britain financed from the Local Loans Fund, for unemployment, and for general Government purposes. The amount is limited to £3,500,000, which sum has been fixed in consultation with the Government of Northern Ireland. The Committee will recognise that the Government of Northern Ireland have assumed very difficult duties at a very difficult period, that the money is essential to the proper carrying on of Government, and that, until matters are more settled and local conditions are more satisfactory, it will obviously be far easier for the Government of Northern Ireland to raise money if the guarantee of the British Government is behind it. I hope the Committee will agree that the guarantee can be justifiably given, and that we have surrounded the giving of it with conditions which will amply safeguard our obligations.

The Committee will notice from the Memorandum that the Bill will provide that the Treasury guarantee shall not be given until the Government of Northern Ireland have provided, to the satisfaction of the Treasury, firstly, for charging on the Consolidated Fund of Northern Ireland the principal of and interest on any such loans and any sinking fund payments for the repayment of the principal of such loans; secondly, for charging on the said fund the repayment to the Treasury of any sum issued out of the Consolidated Fund of the United Kingdom in fulfilment of the guarantee, together with interest thereon at such rate as the Treasury may fix; and, thirdly, for raising or securing the raising of sufficient money to meet the above charges. The Government of Northern Ireland has already provided, by the Exchequer Borrowing and Local Loans (Northern Ireland) Act, 1922, for the charge on the Consolidated Fund of Northern Ireland of the principal and interest of any loans raised, and of any sums issued from the Consolidated Fund of the United Kingdom in respect of the guarantee, and I hope the Committee will agree to the Resolution.

I should like to say one word before we Hass this Resolution, in view of what the hon. Baronet said earlier in the day as to precedents. This must not be taken as a precedent that we are going to lend money to the Free State.

Question put, and agreed to.

Resolution to be reported upon Monday next.