§ MR. W. H. SMITH
asked the Secretary to the Treasury, If he will state to the House, approximately, the amount of the annuity proposed to be created under the Savings Banks (No. 1) Bill, for the discharge of the deficiency of £3,565,000, assumed to exist in the funds of the Trustee Savings Banks, as shown in the Return, No. 200, of this Session; if he will also explain to the House the manner in which it is proposed to deal with the amount to be received by the National Debt Commissioners, so as to extinguish the deficiency; if he will state the present actuarial value of the annuity, assuming the rate of interest to be 3¼ per cent. whether it is proposed to deal with the Post Office Savings Bank Fund on the principles laid down in the Bill; and, whether any steps will be taken to provide for the deficiency of £1,264,000, shown on the Friendly Societies Account?
§ LORD FREDERICK CAVENDISH
My right hon. Friend asks his Question on the assumption that the amount of the deficiency to be provided for under the Savings Banks (No. 1) Bill is £3,565,000, which is the amount of deficiency which existed on November 20, 1879, as shown by the Return, No. 200, of this Session. But the deficiency to be dealt with is that which will be ascertained to exist on the 20th of November next, by valuation in accordance with the Bill, plus the deficiency of interest on the year ending on the same date. Probably, however, the capital amount will not vary very materially from the amount on the 20th of November last; and, assuming that sum, the amount of the annuity, calculated at 3 ¼ per cent as directed in the Bill, which would be required to extinguish that amount in 28 years, may be stated at £80,000 per annum. The annuity to be added in respect of the deficiency of interest for the present year will probably require £1,600 or £1,700 a-year more. 823 We may probably, therefore, state the whole annuity to be created at about £82,000. The National Debt Commissioners will deal with this annuity by investing it and placing it to the account. The accounts will be laid before Parliament yearly, showing the progress of the fund. The present actuarial value of the annuity, assuming the rate of interest to be 3¼ per cent. may be stated at about £1,500,000. This calculation may create misapprehension; and I would, therefore, point out that the Government propose to set aside such a sum yearly as, invested at 3¼ per cent. will produce in 28 years the amount deficient. The operation will not be complete, and the deficiency will not have been made good, until the close of the period for which the annuity is granted. The Government have not analyzed the state of the Post Office Savings Bank Fund upon the principle laid down in the Savings Bank Bill. If, in doing so, they find that satisfactory provision has not been made to prevent the occurrence of deficiency, they will take steps to make such provision. No steps are being taken at present to extinguish the deficiency shown on the Friendly Societies Account; but the Prime Minister alluded to it as a matter to be dealt with hereafter.