Government Guaranteed Stock

Oral Answers to Questions — National Finance – in the House of Commons am 12:00 am ar 30 Ionawr 1947.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield 12:00, 30 Ionawr 1947

asked the Chancellor of the Exchequer if he will quote the text of the Treasury's guarantee of the 5 per cent. Debenture Stock, 1931–1957, of the North Metropolitan Power Station Company, Limited; and if he will give an assurance that the Government does not propose to impair this guarantee by legislation.

Photo of Mr William Hall Mr William Hall , Colne Valley

I am circulating the text in the OFFICIAL REPORT. If this company is taken over under the Electricity Bill, compensation stock will be issued in exchange for this security. Such issue would not impair the guarantee.

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

Does the right hon. Gentleman mean by that last sentence that the default is not a default when committed by Act of Parliament?

Photo of Mr William Hall Mr William Hall , Colne Valley

I meant what I said, and that is that the guarantee was against default by this particular company. That guarantee, of course, still holds.

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

Can the right hon. Gentleman quote any precedent for the treatment of these stockholders and the London Passenger Transport Board guaranteed stockholders?

Photo of Mr William Hall Mr William Hall , Colne Valley

The situation is on all fours with the L.P.T.B. stock.

Photo of Mr Nigel Birch Mr Nigel Birch , Flintshire

In view of the fact that this is the second default on a British Government guaranteed security, will the right hon. Gentleman consider the advisability of making firms distinguish on their balance sheets between Government securities and Government guaranteed stock?

Photo of Sir John Mellor Sir John Mellor , Sutton Coldfield

asked the Chancellor of the Exchequer if he will place in the Library a copy of the text of the agreement, dated 24th September, 1942, between the Treasury and the L.P.T.B., concerning the guarantee of 3 per cent. stock redeemable between 1967 and 1972.