§ VISCOCNT GRIMSTON (Herts, St. Albans)
(for Mr. DIXON-HARTLAND) (Middlesex, Uxbridge) asked the First Lord of the Treasury, Whether, after the strong representations made to him on the subject, the limit of £50 will be altered to £30 in Clause 1 of the Post Office Savings Banks and Government Annuities Bill?
§ MR. WHITLEY (Liverpool, Everton)
also asked, Whether, in the event of the Post Office Savings Banks Bill passing, the Government will extend to the Trustee Savings Banks the same facilities which they propose to give to the Post Office Savings Banks?
§ MR. HOWELL (Bethnal Green, N.E.)
Before this Question is answered, I wish to ask the First Lord of the Treasury whether, having regard to the fact that in addition to the old debt incurred and being paid out of Revenue, amounting to £83,672 annually, there is a further loss to the National Exchequer, in connection with Trustee Banks, of over £9,000 yearly, for cost of management and excess of interest allowed by the National Debt Commissioners to such banks, over the amount produced by the sums deposited with them by the Trustees, he considers it safe to "extend to the Trustee Savings Banks the same facilities which they propose to give to Post Office Savings Banks," seeing that any such extension is sure to involve further and more serious losses to the Revenue; whether the increased facilities for deposit suggested by the Question will not increase the risks to depositors in such banks, as well as cause further losses to the Revenue; and, whether there is any Government security guaranteed to the depositors in Trustee Savings Banks?
§ THE FIRST LORD (Mr. W.H. SMITH) (Strand, Westminster)
, in reply, said, he would answer the last Question first. 82 The figures quoted by the hon. Member in paragraph 1 were substantially correct. But an increase of money deposited with the National Debt Commissioners by the Trustees of Savings Banks would not increase the loss to the Revenue so long as the Commissioners could earn 3 per cent on their investments. On the other hand, an increase in the aggregate amount of deposits would naturally increase the risk of loss to depositors from. fraud or mismanagement. There was no Government security guaranteed to the depositors in Trustee Savings Banks, as the hon. Member was aware; the National Debt Commissioners being only liable to the Trustees for moneys remitted to them for investment. With regard to the Questions on the Paper, the Government had carefully considered this subject in the interests of the industrial classes. It had been urged that sufficient opportunity for saving was not afforded by the limit of £30; but, being met with the demand on the part of the Trustee Savings Banks to have the same power extended to them, it was open to this observation—that they might be tempted to give a larger rate of interest than could be afforded by the Post Office, or safely earned. The Government felt that it would be accompanied with some risk if they extended this increase of power to the Trustee Savings Banks. Under these circustances, and having regard to the opposition with which the Bill was threatened by the Trustee Savings Banks, unless they shared in the extension of the limit of deposit in any one year from £30 to £50, which, the Government felt they could not safely accede to, and looking to the period of the Session, the Government thought it best, on the whole, to abandon the proposal to increase the annual limit of deposit from £30 to £50, and to extend to Trustee Savings Banks the facilities for investment in Consols now enjoyed by the Post Office Savings Bank. They regretted the course they had been compelled to take; but they had no alternative at this period of the Session.
§ MR. HOWELL
asked, whether the right hon. Gentleman was not aware that in 1880 a Bill passed through Committee authorizing an extension of the limit of deposit to £100 a-year, and to £300 as a maximum?
§ MR. W. H. SMITH
said, he was aware that some legislation of that kind passed through Committee; but there were other considerations involved, to which he had not referred, which made them hesitate in concurring in any proposal which would largely increase the amount of deposits held by the Government.