§ Acts considered in Committee.
§ (In the Committee.)
§ THE CHANCELLOR OF THE EXCHEQUER, on rising to move a Resolution said, that as it would be very difficult to discuss the question satisfactorily without details, and as the House could have the details only when the Bill was before it, he would simply move the Resolution which stood on the paper, in conformity with the understanding come to in the House that the discussion should be taken at a convenient time, such as on the question of the second reading. He begged, therefore, to move—
That it is expedient to grant powers for cancelling the charge on the Consolidated Fund for Savings Banks of £24,000,000, and also for cancelling, from time to time. Capital Stocks of Annuities held for Savings Banks by the Commissioners for the Reduction of the National Debt, 556 and for creating, until the fifth day of April, one thousand eight hundred and eighty-five, equivalent Terminable Annuities for Savings Banks in lieu thereof, and to provide for payment of such Terminable Annuities out of the Consolidated Fund.
§ SIR EDWARD BULLERsaid, he had listened to the statement of the Chancellor of the Exchequer on this subject, and had read the Reports in the papers, and he confessed, after all, that he did not understand the plan of the Government, nor had he met any one who did. But, as far as he did understand it, it was this:—There were to be two operations, A and B. The first was to wipe out £24,000,000 of cash, not stock. He wished to know how these £24,000,000 of cash were represented by an interest of £720,000, that being nearly 3 per cent. There was another point which he would wish to have cleared up. The Chancellor of the Exchequer had stated that there were £3,000,000 due to the trustees of the savings banks over and above the £24,000,000."Was he right in stating that? If he understood the scheme rightly, it was that £1,725,000 was to be annually paid for the purpose of extinguishing the £24,000,000, and at the end of eighteen and a half years we were to enter into an engagement for another term of eighteen and a half years, or a longer period. The right hon. Gentleman would extinguish, in the course of about eighteen years, £12,000,000. There would then remain about £12,000,000 more in the hands of the Commissioners of the National Debt for the purpose of satisfying the demands made by the depositors. So that in 1885 we should be in this position:—We should have wiped off £24,000,000 of money, but of that sum £12,000,000 would be in the hands of the Commissioners of the National Debt, applicable to the payment of depositors. That was proposal A, as far as he understood it. Then came proposal B, which was to apply £12,000,000 of assets to carry out something like the same process, and to purchase annuities which were to expire either in 1885 or 1905. Now, he wanted to know how these £12,000,000, which represented something like £13,500,000 stock, were to be converted into annuities. Did the Chancellor of the Exchequer intend to purchase annuities from time to time as he had £500,000 in his hands, or was he to purchase stock in the first instance, and convert that stock into annuities—was that to be done every year, and what was to be the term of years for which the annuities 557 were to be granted? Were the annuities to be granted next year, and then for a period terminating in 1905, or every year for a period of twenty years, so that gradually they would be reduced from year to year, and terminate in a small sum in 1905?
§ LORD ROBERT MONTAGUsaid, he rose not to continue the discussion, but rather to ask whether it was in order to go into it at all. On the Paper which hon. Members received on Saturday morning the second Order of the day was the Merchant Shipping Act, 1854, and that was the state of the Orders when the House rose on Friday evening. But when he came down to the House to-day he found that the Orders had been altered; this National Debt question had been intercalated between the first and second Orders as they had appeared on the Paper on Saturday morning. Now, it was not right that hon. Members should be placed in that position. This was a subject of the greatest importance. If the hon. Member for Buckingham (Mr. Hubbard), for instance, wished to raise a discussion on the National Debt Bill, and if, relying on the Paper which he received on Saturday morning, he had gone to his country seat (believing, from the position in which the question had stood on the Orders this morning, that it could not possibly come on for discussion to-night), he would have lost the opportunity which he desired, and the House would have lost his knowledge and experience. He therefore wished to ask, as a matter of order, whether they could go into the question of the National Debt Acts now?
THE CHAIRMANsaid, the Question of the noble Lord was a Question for the House, and not for the Committee. The House had referred the consideration of the National Debt Acts to the Committee, and the Committee could not, therefore, inquire into the question raised by the noble Lord.
§ LORD ROBERT MONTAGUasked, whether he was to understand that he should refer the point to the Speaker before the Report was presented? He had not had an opportunity of doing so before the Speaker left the Chair.
THE CHAIRMANsaid, the noble Lord would have no difficulty in finding opportunities of raising the Question. When the Report was brought up there would be no difficulty in doing so.
VISCOUNT CRANBOURNEsaid, he 558 should like to know whether the Chancellor of the Exchequer had been conscious of this curious manipulation. Were they to attribute this alteration, which might have misled many persons anxious to discuss this question, to the officers of the House, or to any Member of Her Majesty's Government? Those financial questions were matters upon which the House ought to insist upon having ample notice, and for this reason—that the decision of them rested with that House alone; and if by any accident full consideration was not given to them, the error was irreparable, as no action could be taken upon them in another place. He hoped, therefore, the right hon. Gentleman would take notice of the irregularity which had occurred. On the Notice paper of Saturday this measure was put down as No. 22; it was afterwards removed to the second place—a matter about which they had no notice, and after the Papers were sent round on Saturday.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, the intention of the Government certainly was, that this measure should be brought forward this evening, and that intention was made the subject of conversation more than once during the last week. He thought it was fully understood that it was the intention of the Government, so far as depended upon them, with the approval of the House, to move the Resolution this evening. With respect to the question put to him by the noble Lord (Viscount Cranbourne), his knowledge was very limited. He had seen the Order in the middle of the list, but when he came down to the House he found it promoted to the second place. He apprehended whatever mistake was made must have been made in the Notice paper of Saturday, and that the Order was only restored to its original place. With respect to the questions which had been asked by his hon. Friend behind him (Sir Edward Buller), there were some of them that could hardly be discussed until the Bill was in the hands of Members; but with regard to others he was able to give an answer. With regard to the first question, why, when £24,000,000 was to be converted, the interest was only £720,000, the explanation was to be found in the history of the transaction by which the book debt was created. That book debt of £24,000,000 represented what was previously £24,000,000 of stock, and when by the vote of the House that stock 559 was converted into a book debt the interest was not changed—it remained at 3 per cent as before. At the time of the conversion the annuities must be created with reference to the existing state of the funds. Hence had arisen a considerable deficit on savings banks stock. They were liable to this state of things with regard to the savings banks money. They received deposits when there was great abundance of money, and when the funds were high; consequently, investments were made at high prices; but when the funds fell, perhaps 10 per cent, a portion of the deposits was called for, and sales were made at low prices. The operation now proposed would repair this deficit, but at the cost of an actual payment of cash. With reference to the £3,000,000, it was included in the £24,000,000. The engagement connected with what was called the operation A was limited to eighteen and a half years. The first payment would be made at the end of this year, and the last payment in 1885. It was quite impossible to anticipate how much of the deposits of savings banks would be withdrawn in any future year; the only data they had on that point was the extent to which they had been withdrawn to the present time; but the sum which would be ready for that purpose was so very large—so much beyond any draughts hitherto made, that the presumption was that about £500,000 a year would remain. Then as to the £12,000,000, which would be in the hands of the Commissioners in 1885, it would be the business of the Commissioners to make investments from time to time, and he did not think a large sum would be allowed to accumulate. He now answered these questions dryly and without entering into the scheme, which would be best understood when the Resolutions were in the hands of Members.
§ SIR FRANCIS CROSSLEYexpressed his great satisfaction that the attention of the Chancellor of the Exchequer had at last been given to the subject of the National Debt with a view to place it on a more satisfactory footing. In the course of the right hon. Gentleman's able speech when he introduced his Budget he had told them that there were two ways, and only two, in which they could deal with this question. The first he said was to apply the whole or a portion of the surplus to pay off a portion of the debt outright, and the second was to apply the same amount to pay the difference in value 560 between terminable annuities and Three per Cent Consols. He also told them that he had received many suggestions by letter with various schemes for reducing the National Debt by creating terminable annuities. He (Sir Francis Crossley) could not claim to have been one of his correspondents on that subject; but ever since he had had the honour of a seat in that House he had not failed on every suitable occasion to bring forward the question of creating terminable annuities in lieu of the permanent debt. But the right hon. Gentleman had told them that the great obstacle to his taking the advice given was that no one wanted to buy terminable annuities on the Stock Exchange; but he (Sir Francis Crossley) thought it was going rather too far to find fault with there being no buyers of terminable annuities on the Stock Exchange when the fact was they had not been offered—before there were buyers there must be sellers, and he had too much faith in the prudence of the dealers on the Stock Exchange to imagine that they would not buy the stock that was cheaper than the Three per Cent Consols. Whilst he did not object to the short terminable annuities now proposed by the Chancellor of the Exchequer he was in favour of much longer terminable annuities being offered as well; and he had on several occasions stated in that House that if the Chancellor of the Exchequer would year by year lay by £500,000 out of his surplus for the purpose of paying the difference between terminable annuities at 100 years hence and Three per Cent Consols, that amount would pay the difference in value between upwards of £10,000,000 of terminable annuities at 100 years hence and Three per Cent Consols. But, supposing the right hon. Gentleman were correct in saying that terminable annuities would not be a favourite stock, still the only result would be that the £500,000 instead of converting 10⅓ millions, as the exact value would do, might convert rather under £10,000,000 thus giving those who purchased terminable annuities the advantage in value to that extent. The amount of our debt was so colossal that merely to pay it off outright with a portion of the surplus made no impression upon it; for instance, if £2,000,000 were paid off directly we should merely be paying 5s. in the £100 or bankers commission upon it, whereas by the terminable annuities a half million would transpose £10,000,000 interminable 561 annuities to be terminable 100 years hence. The Chancellor of the Exchequer had remarked that it would have been unwise to have attempted to deal with the National Debt until our commercial legislation had been placed on a satisfactory footing, but looking at the prosperity we had had for many years back, he win unable to endorse that opinion. He quite admitted that the point to which the right hon. Gentleman had referred was the more important of the two, but he thought it would have been much wiser to allow the two to proceed hand-in-hand in the mode which he had described. The right hon Gentleman had drawn their attention to the important subject of the decrease of our coal supply in this country. He should be sorry to be able to think that it would be completely exhausted in so short a time as the Chancellor of the Exchequer had led them to suppose; still he was perfectly correct in this, that there was no country in the world where coals could be brought to the surface so cheaply as in this, and being an island the coals were near to the sea-board when so brought to the surface, consequently there was very great danger of rapid exhaustion taking place. He (Sir Francis Crossley) believed also that his statement was correct as to the quantity of coal in this country, being but the one thirty-seventy part of the quantity in America; but in that country the wages were high, it was a continent, and not an island, and consequently it would be very difficult to get the coal to the seaboard. He thought the Chancellor of the Exchequer had done good service in bringing this important subject under their consideration, and had shown that it was wise and prudent that no time should be lost in placing our National Debt on a more satisfactory footing, and he (Sir Francis Crossley) hoped that, whoever might be the Chancellor of the Exchequer in future years, the system of terminable annuities would be more extensively adopted, for the reduction of the debt in time of peace was the best preparation we could make for war.
§ MR. WEGUELINsaid, the great point to be considered was whether the country would bear the extra charge proposed for the purpose of paying off the debt by instalments — which was the real operation of terminable annuities. He would suggest to the Chancellor of the Exchequer that there was a fund which might very fairly be applied to this object. 562 The right hon. Gentleman stated the other night that the Exchequer Loan Commissioners had lent altogether about £10,000,000, which appeared every year under the head "Repayment of Advances" in the Revenue Accounts. It appeared to him that the receipts from this source might be applied to the creation or payment of these annuities; which would be attended with this advantage, that in times of difficulty, when it might be requisite for the Government to raise money, these loans could be suspended.
§ MR. WHALLEYprotested against its going forth to the world that our national pre-eminence depended upon our coal-fields, for it was really dependent on our energy and enterprize—qualities which would enable us to bring coal from America or any other part of the world, if our own deposits were exhausted. He protested against the doctrine that if our supply of coal were to fail we should at all descend from our position as a nation.
§ MR. LAINGsaid, that irrespective of the details of this measure, a very important principle had been mooted in eloquent speeches recently delivered on the question. It would be a great convenience if the Chancellor of the Exchequer would state whether the discussion upon it would be taken before or after that on the Reform Bill, or whether it would be taken before the Whitsuntide recess.
§ THE CHANCELLOR OF THE EXCHEQUERwas afraid that, having regard to other subjects still more important, he could only repeat his promise of giving ample notice. He should be glad if the second reading could be fixed for Thursday week, but until he knew what course was likely to be pursued in regard to the Bill he had introduced that evening he could make no definite arrangement.
§ Resolution agreed to.
§ Resolved, That it is expedient to grant powers for cancelling the charge on the Consolidated Fund for Savings Banks of £24,000,000, and also for cancelling, from time to time, Capital Stocks of Annuities held for Savings Banks by the Commissioners for the Reduction of the National Debt, and for creating, until the fifth day of April, one thousand eight hundred and eighty-fifty, equivalent Terminable Annuities for Savings Banks in lieu thereof, and to provide for payment of such Terminable Annuities out of the Consolidated Fund.
§ House resumed.
§ LORD ROBERT MONTAGU(Mr. Speaker being in the Chair) said, he 563 would now call attention to the point of Order he had previously mentioned. He wished to observe that the Paper containing the Orders of the Day which had been laid upon the table that evening differed from the Paper which had been supplied to Members on Saturday morning. The National Debt Bill stood second on the one paper and appeared as the twenty-second Order on the other. That alteration might have led to serious inconvenience. He wished to know whether such an alteration could legitimately be made.
§ MR. SPEAKERsaid, the House was aware that on Friday evening the Chancellor of the Exchequer fixed the Committee on the National Debt Acts as one of the Orders for this evening, and that the Government had the power of arranging those Orders in the way which appeared to them most convenient for the despatch of public Business. The Committee on Ways and Means and the Committee on the National Debt Acts were intended to stand next each other, but they were accidentally separated and printed apart. On Saturday, knowing what the intention of the Government was and what was proposed, for the convenience of public business, the Clerk directed that the change should be made.
§ Resolution to be reported To-morrow.