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National Finance

Volume 389: debated on Tuesday 25 May 1943

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Government Borrowing (Bank Loans)


asked the Chancellor of the Exchequer whether he is aware that £1,500,000,000 new money has been created by the banks since the commencement of the war until the late autumn of 1942; and whether he is in a position to state what it costs to create this money?

I do not agree with the implication in the first part of the Question, nor do I follow the figure there given. I can only refer my hon. Friend to the answer I gave him on 11th May, to which I do not think I can usefully add.

Arising out of that most unsatisfactory reply, may I ask my right hon. Friend whether he is aware that the figure given in the Question has been computed by a well-known authority on this subject, and if I put another Question down to my right hon. Friend, will he state specifically what he considers the amount of newly-created money to be?

No, Sir. As I guessed it, the figure had come from Stokes's Encyclopedia of Phrase and Fable. [Laughter.]

This is not a laughing matter. Has my right hon. Friend taken the trouble to assess for himself the amount of newly-created bank money since the war started? Does he not think it is one of his duties as Chancellor of the Exchequer to do so?



asked the Chancellor of the Exchequer whether, in view of the fact that we pay 3 per cent. on £90,819,000 borrowed from the United States of America for war purposes, he proposes to invite the United States of America to borrow a similar amount from us at 3 per cent. to pay for a portion of supplies and services now rendered by us to the United States of America under Lend-Lease or to make other- suitable arrangement to the same effect?

No, Sir. This would not be in accordance with the Reciprocal Aid Agreement of 3rd September, 1942 (Cmd. 6389).

In view of the fact that probably most of the £90,000,000 mentioned was bogus bank-manufactured money, would it not be at least a gracious thing for the Government of the United States to suspend payment of interest for the duration of the war?

Post-War International Currency


asked the Chancellor of the Exchequer the theoretical aggregate of the quotas as defined in the Clearing Union plan, on the assumption that all the United Nations came into the scheme?

I am grateful to my right hon. Friend for asking this Question. In the course of the Debate on the Clearing Union Plan I said that this aggregate amounted to £25,000,000,000. I should have said 25,000,000,000 dollars.

Is the Chancellor of the Exchequer satisfied that even his figure of 25,000,000,000 dollars is correct? Is it in fact the aggregate of the sum of the export and imports of the United Nations, or is it the 75 per cent. of that sum which is suggested as the basis of quotas in the Keynes plan?

Perhaps my right hon. Friend will allow me to consider that question, and I will give him a considered answer.

Old Age Pensions (Computation Of Income)


asked the Chancellor of the Exchequer whether it is his intention to bring the computation of income derived from capital in the case of persons claiming a non-contributory old age pension into line with the proposals relating to supplementary pensions in Clause I of the Pensions and Determination of Needs Bill now before Parliament?

Under the Pensions and Determination of Needs Bill the national income assumed to be derived from capital up to £400 would be substantially the same under both the Supplementary Pensions Scheme and the Non-contributory Old Age Pensions Scheme; beyond this point in the case of Supplementary Pensions capital is regarded as available to meet the applicant's needs. There are, however, respects in which the noncontributory pensioner in possession of capital has advantages over the supplementary pensioner, and assimilation of the two systems would clearly not be of benefit to the non-contributory pensioner.

Could the right hon. Gentleman explain whether what he is referring to concerns the calculation for the purpose of assessing whether the individual is entitled to a pension under the non-contributory scheme apart from the supplementary pension?

The matter I had in mind which made it clearly not of benefit to the non-contributory pensioner was the absence of the £400 limit which I have referred to in my answer and the special deduction from means not derived from earnings.

Does the right hon. Gentleman not think it is a little unfair that when a person hopes to get a pension he has first to submit to a calculation based on one set of figures, and that if he gets his pension and then has to apply for supplementary pension, his capital should be taken on an entirely different set of 'considerations?

Yes, Sir, that may be so, but it is to the advantage of the noncontributory pensioner. We shall have an opportunity when the Clause in the Bill comes before us to deal with the matter a little more fully.

Are the Government really going to proceed with the Bill, in view of the large number of abstentions and votes against it?

Officer Prisoners Of War, Italy (Income Tax)


asked the Chancellor of the Exchequer whether officer prisoners of war imprisoned in Italy are allowed a deduction from their income tax liability in respect of sums deducted from their pay for their maintenance in the prison camps?

In accordance with the normal practice, in the case of serving officers who are abroad, the Service pay, but not the family allowance, of a prisoner of war is assessed to United Kingdom Income Tax, and there is no deduction for amounts spent on maintenance. I understand, however, that in the cases to which my hon. Friend refers a special allowance is credited to the officer's account here towards the expenses on account of maintenance which have to be met from his pay issued in Italy, and this special /allowance, like the family allowance, is not charged to United Kingdom Income Tax.

United States Silver


asked the Chancellor of the Exchequer whether the price of the United States silver to be made available to industry will be fixed by the Government or by the bullion market; and whether the arrangements have the approval of the United States Administration?

The price of U.S. silver to be made available to industry will be fixed by the Treasury. This continues the existing arrangement, and the question of obtaining the approval of the U.S. Administration has not arisen.

Private Business (Notice To Members)

May I ask you, Mr. Speaker, whether you have any statement to make in regard to the publication of notices concerning Private Business?

Yes. I have looked into this matter, and I can now announce that the office clerks in the Vote Office have instructions to draw the attention of Members calling for the Blue Papers to the Private Business sheet on any day when there is one published and on any such day the box containing Private Business sheets will be placed alongside the box for the Blue Papers in the Members' entrance. I hope that these arrangements will be sufficient to keep Members informed of Private Business to be taken in the House on any particular day.

Thank you very much indeed, Sir, for the great trouble you have taken in this matter.