Local Authorities Loans Act 1945

3 Provision of moneys for loans

(1) The Treasury may, if they think fit, instead of raising any sums required for the local loans fund by the creation of local loans stock under section eight of the [50 & 51 Vict. c. 16.] National Debt and Local Loans Act, 1887, or other securities under section twenty-eight of the [25 & 26 Geo. 5. c. 24.] Finance Act, 1935, issue the like sums to the local loans fund out of the Consolidated Fund of the United Kingdom or the growing produce thereof (hereinafter referred to as the " Consolidated Fund").

(2) For the purpose of providing sums to be issued out of the Consolidated Fund under the last foregoing subsection, the Treasury may at any time, if they think fit, raise money in any manner in which they are authorised to raise money under the [2 & 3 Geo. 6. c. 117.] National Loans Act, 1939, and any securities created and issued to raise money under this subsection shall be deemed for all purposes to have been created and issued under the National Loans Act, 1939.

(3) Any sums issued to the local loans fund out of the Consolidated Fund under this section shall be repaid to the Exchequer out of the capital account of the local loans fund at such times and by such methods as the Treasury may direct, and interest thereon at such rate and at such times as the Treasury may direct shall be paid into the Exchequer out of the income account of the local loans fund.

(4) Sums paid into the Exchequer under the last foregoing subsection shall be issued out of the Consolidated Fund at such times as the Treasury may direct and shall be applied by the Treasury as follows :—

(a) so much thereof as represents principal shall be applied . in redeeming or paying off debt of such description as the Treasury think fit ;

(b) so much thereof as represents interest shall be applied to the payment of interest which would, apart from this paragraph, have fallen to be paid out of the permanent annual charge for the National Debt.