I wish to inform the House that a new National Loan to be known as Exchequer Stock will open for subscription on Monday next, 31st October. The Loan will be for £15 million but £3 million of the stock is being allotted to certain life assurance offices and Departmental funds so that the amount available for public subscription will the £12 million which will be underwritten jointly by the Banks and the Government. The rate of interest will be 6 per cent. per annum and the price £99 for each £100 of stock purchased. The Stock will be redeemed at par not later than 1985 and may be redeemed at any time from December, 1980. As the issue is being made at a discount, there will be a capital gain of £1 per cent. on redemption and this will be tax-free to the ordinary investor.
The usual provision is made in the Prospectus whereby only 10 per cent. of the purchase price need be paid on application, the remainder being paid in three further instalments spread over the period until early January. This should facilitate investors in taking up stock. On the other hand, those who wish to pay the full amount on application next week, or to complete their subscription on allotment later in November, will be entitled to discount equivalent to an interest rate of 6 per cent. on the advance payments.
The tax privileges attached to recent National Loans are again included. Interest will be paid without deduction of income tax at source, but, of course, will be assessable to tax in the hands of recipients ordinarily resident in the State. Stock of the issue will be accepted at its nominal value as the equivalent of cash in satisfaction of death duties on properties of which it formed a part. The stock and the interest on it will be exempt from all Irish taxation, present and future, if owned by a person neither domiciled nor ordinarily resident in the State.
The issue is being made under the authority of the Appropriation Act, 1960, and other statutes. Both principal and interest will be a charge on the Central Fund. The attractive interest rate it carries, its status as a trustee security, the concession whereby it will be accepted in payment of death duties and the substantial sinking fund allocations should ensure that the stock will always have a high market value. The Government stockbroker will at all times be prepared to buy and sell reasonable amounts of the stock, and this will help to maintain an active market in it.
The 5½ per cent. National Loan, 1966, which was issued in October, 1956, carried a right of conversion into any public issue made by the Government within five years. I am giving effect to this right in the present issue. Stock of the new loan issued under this conversion arrangement will be additional to the £15 million of stock offered for cash subscription.
The Loan is required to finance State capital outlay on agriculture and industry; on housing, sanitary services and schools; on afforestation and fuel resources; and on other development schemes in pursuance of the Programme for Economic Expansion outlined in the Government White Paper published in November, 1958
As Deputies are well aware, it is primarily to our own people we must look to provide the funds needed for national development. It is only by applying the maximum amount of resources to productive purposes at home that we can increase employment and raise living standards. I should like, therefore, to stress once again the continuing need for a large volume of savings. The amount saved in 1959 showed a gratifying increase on the previous year but it is necessary to maintain the improvement if we are to continue, without setback, the development of our economy. The new loan gives an excellent opportunity for the investment of savings and subscribers to it will be doing their part to promote national development while at the same time securing for themselves a safe investment and a very attractive return on their capital.
The Prospectus of the issue, with the application form for cash subscriptions attached, will be available tomorrow from any bank, stockbroker or Post Office. The lists will close not later than Friday, 4th November.
I confidently ask for the full and active support of every Deputy in the House for the issue.
