I wish to inform the House that a new National Loan will open for subscription on Monday next, 19th November. The Loan will be for £20 million but £4.8 million of the stock is being allotted to certain life assurance offices so that the amount available for public subscription will be £15.2 million which will be underwritten jointly by the Banks and the Government.
The rate of interest will be 5¾ per cent. per annum and the price £99 for each £100 of stock purchased so that the annual return on each £100 of cash invested in the stock will be £5 16s. 2d. The stock will be redeemed at par not later than 1987 and may be redeemed at any time from October, 1982. 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 to the middle of 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 12th December, will be entitled to discount equivalent to an interest rate of 5¾ per cent. per annum 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, holders will, if ordinarily resident in the State, be liable for whatever tax on the interest is appropriate to their respective incomes. 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, 1962, 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.
An additional £5 million of the stock will be issued to Departmental Funds in conversion of Ways and Means Advances to the Exchequer.
The Loan is required to assist in the financing of State capital outlay on agriculture and industry; on housing, sanitary services and schools; on afforestation and fuel resources; on transport and on other development schemes in pursuance of the Programme for Economic Expansion.
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 high level of savings. The new loan gives an excellent opportunity for the investment of savings, and subscribers to it will be doing their part to promote the development of the national economy while at the same time securing for themselves a safe investment and an attractive annual return on their capital.
The prospectus of the issue will be published in to-morrow morning's newspapers. Copies of the prospectus with the application form for subscriptions attached will also be available as from to-morrow from any bank, stockbroker or post office. The lists will close not later than Friday, 23rd November.
I confidently ask for the full and active support of every Deputy in the House for the issue.
