SECOND READING. [ADJOURNED DEBATE.] (Hansard, 22 July 1890)

§ (6.35.) DR. CLARK (Caithness)
I understand that my hon. Friend the Member for Sunderland is anxious to say something on behalf of the Banks whom he thinks have not yet had the opportunity of stating their case. I think myself the case has been fully gone into, and nothing remains that cannot be dealt with in Committee. With the modifications the Chancellor of the Exchequer suggests, I think the Bill ought to go through.

§ *(6.36.) MR. LENG (Dundee)
I will only say a few words in support of that view. The Chancellor of the Exchequer has met a very large deputation representing banks in England, Scotland and Ireland, and has made concessions to that deputation which have almost entirely satisfied them. Some remarks were made last night as to the serious condition which it was alleged some of the banks presented, but that seems to me an argument not for delaying but for proceeding with the measure. I do not think it necessary to detain the House, but on the part of the Scotch banks I may say that they are exceedingly well satisfied at the way in which they have been met by the Chancellor of the Exchequer, and there is every anticipation that the Amendments he has placed on the Paper will meet with general acceptance.

(6.37.) MR. SHAWLEEEVRE (Bradford, Central)
I have no intention to continue the Debate, because all that remains to be said may be reserved for the Committee stage. I do not know that it can be shown that the concessions made are altogether satisfactory; so far as I understand they are somewhat a whittling down of the suggestions of the Committee last year, suggestions which, I believe, are of a very moderate character in themselves. From the draft of the proposed Amendments, with which the right hon. Gentleman has been good 542 enough to supply me, some of them seem to destroy the recommendations of the Committee. But the main project is the constitution of the Committee of supervision, and that can be more practically discussed on the 2nd clause.

§ (6.38.) MR. STOREY (Sunderland)
I am just a little anxious to submit a few questions.

§ * MR. SPEAKER
The hon. Member having already spoken, and moved the adjournment of the Debate, has exhausted his right to speak.

§ MR. STOREY
That, Sir, was on the adjournment of the Debate on the Amendment.

§ * MR. SPEAKER
That Amendment the hon. Member for Bethnal Green asked leave to withdraw.

§ MR. STOREY
And the House objected to that.

§ * MR. SPEAKER
Yes; and upon that the hon. Member spoke, and moved the adjournment of the Debate.

§ MR. STOREY
What I understand took place, Sir, is that there was a Division upon the adjournment of the Debate upon the Amendment. The Division decided against the adjournment, and afterwards the hon. Member asked to be permitted to withdraw the Amendment. I am quite clear upon that. After that the right hon. Gentleman the First Lord consented to an adjournment.

§ * MR. SPEAKER
I have the record of the proceedings here. The hon. Member for Bethnal Green moved an Amendment. Upon that the hon. Member moved the adjournment, and consequently, under the Rules of Debate, he has spoken and cannot speak again.

§ MR. BUCHANAN (Edinburgh, W.)
May I ask, Sir, is the Amendment of the hon. Member for Bethnal Green still before the House?

§ * MR. SPEAKER
The hon. Member for Sunderland interposed on the question before the House with a Motion for adjournment. That constitutes a speech.

§ MR. BUCHANAN
But will you inform us, Sir, what is the question before the House now? Is it the Amendment?

§ * MR. SPEAKER
The original Question was that the Bill be read a second time, to which the hon. Member for Bethnal Green moved an Amendment. The hon. Member will find the position set out in 543 a note at the foot of the Orders of the Day.

§ MR. HOWELL (Bethnal Green, N.E.)
With the permission of the House, I will withdraw my Amendment after the explanation given.

§ (6.40.) MR. STOREY
I will trespass on the time of the House but a few minutes, for I have no disposition by long speeches to retard the progress of the Bill. The right hon. Gentleman will agree that I had some reason to complain last night. The fault is no more that of the Government than my own. I had serious objection to the measure, and the right hon. Gentleman was good enough to promise that before the Second Reading he would put before us the Amendments to which he was willing to agree, so that I might ascertain if my strong objection to the original scheme was assuaged. Owing to misadventure a copy of these Amendments did not come into my hands until after the Division last night, and had not reached me when I made my objection. Since then I have availed myself of the courtesy of the right hon. Gentleman and have examined the Amendments, and I am bound to say that, while the Bill as originally drawn was in my judgment an exceedingly reprehensible and unnecessary Bill, the Amendments to which the right hon. Gentleman has consented have, to a considerable degree, modified the objections which I and many persons connected with Savings Banks have felt. After saying that, I will occupy a few minutes in stating the views of the Savings Banks, and perhaps I shall not be thought at all impertinent in expressing those views when I say that personally I have filled every position in connection with the management of a Savings Bank. I have been auditor, secretary, manager, and, at the present time, I am Trustee of a thriving and very considerable Savings Bank in my own town of Sunderland. For 20 years I have studied the law dealing with these banks, and the method of their operations. I know the position to which they have attained, and the points upon which they have reason to complain. I think the object with which the Bill 544 was originally drawn entirely unnecessary. I think that the statements made regarding Savings Banks have been grossly exaggerated, and in some particulars they have been most unfair and unjust to those most valuable institutions. These institutions existed long before the Post Office Savings Bank, and were started and have been carried on by a number of gentlemen from philanthrophic and humanitarian motives, to assist the people in acquiring habits of thrift. I was grieved and astonished to hear the charge made last night that politics entered into the management of these banks. My experience is that they are managed by persons of all religious creeds and political opinions, who work together on broad humanitarian principles. We have Church of England clergymen, Catholic priests, Nonconformist ministers, all acting together on broad humanitarian grounds for the encouragement of thrift. The remark was an unfortunate one. I do not agree with it, or in the fear entertained that the proposed Committee will have a political aspect. While I say this, I say that Savings Banks, established and carried on as I have said, have been hardly treated on both sides of the House by officials, and by private Members. What are the facts? I am credibly informed, on the authority of an hon. Gentleman opposite, that there are 300 or 400 of these Trustee Savings Banks in existence, and in the course of 50, 60, or 70 years, for many of them have been in existence so long, there have been a few instances only in which there have been defalcations, and some slight loss to depositors. I do not think that any business transactions can show a much better record. During their existence these banks must have turned over capital to the amount of £1,000,000,000, and in the course of these transactions there have been very few departures from rectitude in the management and losses to depositors. Is there any public department or private business of which more can be said than of the Trustee Savings Banks as a whole? I appreciate the public spirit and honesty of purpose actuating my hon. Friend (Mr. Howell), but I think he is not altogether zealous with knowledge. He made some notable admissions. He said the law at present, if properly administered, is amply sufficient for 545 securing proper government of the banks. But what more can be said of any law? It is admitted that the managers or Trustees have not been the people who have made a profit out of the small amount of defalcations which have taken place, and if this is all the indictment that can be brought against them, it will not be possible for any change in the law to guard absolutely against dishonesty on the part of paid officials. By no system of public audit can you absolutely guard against that. In my judgment, and in that of many connected with Trustee Savings Banks, no such legislation as is now proposed is necessary at all. But the Government having determined to take up this legislation the managers of these banks, taking a common-sense view, said, "We will get the Bill amended as far as we can, and make the best of a bad business," but let me say in regard to opinions expressed by managers of banks in favour of the Bill, that though they have expressed satisfaction at the changes made in the original Bill, there are a considerable number of them who think there was no necessity to have moved in the matter at all. Looking at the Bill, as amended, I may venture to point out that there are even yet some changes that ought to be made in Committee. I do not know whether hon. Members have noticed what the first clause originally was. Of course, as it has been revised, I will not discuss it, but I may mention that it absolutely provided that Savings Banks should stamp on the face of every pass-book the fact that the Government are not responsible for the security of the funds of the Savings Bank. A more unjust, a more unfair slur to 'cast upon a great institution, or a set of great institutions, which have done untold good, I cannot conceive. The Chancellor of the Exchequer smiles when I speak of a slur being thus cast, but what would he say, if in any business with which he happened to be connected, an Act should specially provide that every invoice should bear the statement that the Government had no responsibility for money concerned? Why, it would not be true. Savings Banks have between £40,000,000 and £50,000,000 capital, and every penny of the money, except about £2,000,000, is invested with the Government, so that 546 for 38–40ths the Government must be responsible.

§ THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN,) St. George's, Hanover Square
The point is not whether the Government are responsible for the funds invested, but whether the Government are responsible to the depositors. It was to prevent depositors having the belief that the Government are responsible for disasters that may occur. There was no desire to cast any slur upon Trustee Savings Banks, but simply a desire to state the fact that the Government are not responsible for deposits.

§ MR. STOREY
Well, I need not discuss it, for the right hon. Gentleman has accepted an Amendment at the hands of the managers of the banks that the statement on the pass books shall be that the Government are only responsible for the funds invested with the National Debt Commissioners. It is a concession for which we are not ungrateful. If in Committee he will accept a further and consequential Amendment, setting forth that the books shall also bear on the face of each the amount of money the bank has so invested, that will be an additional advantage to the banks. I will not trouble the House with the observations I intended to make on other clauses, because I admit they are points of detail I can raise in Committee, but there is one point to which I invite serious attention. I ask the attention of every hon. Member connected with Savings Banks to the proposed omission from the Bill of Clause 11. As the House is aware, at the present time a depositor is only allowed to have £150 altogether in a Savings Bank, which may accumulate by the addition of interest to £200. Clause 11 proposes that in future a depositor may have £200 in the bank, and may draw out the interest every year. The Chancellor of the Exchequer now proposes to withdraw that clause. I listened to the observations of the right hon. Gentleman not only with regret but with positive anger at the way he and his predecessors have treated Trustee Savings Banks in this matter. It must be remembered that the old limit was adopted at a time when £150 was a very large sum for a working man. As working men have grown in means, and in the present prosperous state of the 547 country, £150 by no means represents the same proportion to wages as it did in old days; it is easier now to save £300 than 50 years ago it was to save £150. It was recognising this fact that the right hon. Gentleman the Member for Mid Lothian—I wish he were present now, for he and his Government deserve blame, though perhaps those right hon. Members who were Members of his Government, and are now on the Front Bench, will take the blame on their shoulders—the Government of the right hon. Gentleman brought in a Bill in 1880, and the present Chancellor of the Exchequer shares the responsibility, for he was a Member of that Government.

§ MR. GOSCHEN
NO, not in 1880.

§ MR. STOREY
I thought the departure of the right hon. Gentleman from among us was of more recent date, but I find I am wrong. The Government of the right hon. Gentleman the Member for Mid Lothian brought in the Savings Banks Bill, and that was a double-barrelled Bill; it contained clauses reducing the interest payable by the Government to Trustee Savings Bank, and for increasing the amount that workmen could deposit. What was the fate of that Bill? The right hon. Gentleman came down to the House one day and told us that he proposed to ask the House to pass the first part of the Bill, but in deference to opposition in certain quarters, he would not press the second part; but he gave a distinct promise that it should be brought on in the next year. The House accepted his proposal, as the House was in the habit of doing in those days. We were anxious to have the limit of deposits increased, though we did not wish to have the rate of interest diminished. But next year came, and the Bill was never re-introduced, or, if it was, it was not passed. I am told it was never re-introduced. So the engagement made with the Savings Banks has never been kept to this day. It was a fair engagement, taking account of the new state of things arising out of the different character of the time. It recognised that working men could well afford to save more money, and that there ought to be no absurd limitations placed by Parliament on their willingness to save. I did hope that when the right hon. Gentleman brought in this Bill he would have carried out the engagement 548 entered into by the Liberal Government, and have increased this limit. But what has the Chancellor of the Exchequer now done? Why, he has withdrawn Clause 11, out of deference to opposition from certain quarters. No doubt the House well understands what are those quarters. The House well knows that it is the Joint Stock and other Deposit Banks which forced the right hon. Gentleman the Member for Mid Lothian to give up his proposal, which was similar to this, and it is the same opposition which is preventing the Chancellor of the Exchequer from pressing this matter at the present time. Workmen now have become more prosperous, they have more means and better wages, and are able to save larger sums than formerly, and, therefore, it is a just thing that the amount they can deposit should be enlarged. I submit that it is to the public interest that these limits should be increased. The proposal made was, in all conscience, moderate enough; to my mind, it was entirely inadequate, and I think the limit should have been at least £300. I hope the right hon. Gentleman will realise that his chance of carrying this Bill through is by no means enhanced by his withdrawal of this clause. I trust that the Government are in such a frame of mind that they will willingly concede anything in order to secure the passing of the Bill, and I, therefore, give notice to the Chancellor of the Exchequer that I shall put down Amendments which, if adequately supported, will enable the right hon. Gentleman to disregard the opposition, the interested as against the public opposition, of these Joint Stock and Deposit Banks, and which also will enable him to fix the limit at £200.

§ (7.7.) MR. SHAW LEFEVRE
It was my intention to postpone the remarks I had to make on this question, but I hope I may be permitted to say a few words. Having been a Member of the Committee to which the Bill was referred, and recognising that it is founded mainly on the recommendations of the Committee, it is my intention to give the Government whatever assistance I can in the passing of the Bill. My hon. Friend the Member for Sunderland commenced his observations by saying that the Bill was unnecessary, and that the evil it was 549 intended to cure was greatly exaggerated. I must protest against that statement. The Committee which sat on this subject last year, and which gave the greatest possible attention to the subject, unanimously agreed that considerable changes in the law were necessary. I may, at this point, thank the hon. Member for Bethnal Green for having raised this question, for I think the Resolution of the Committee abundantly justified the action he took, and although, perhaps, the Bill does not go so far as he desired, yet I think a public service has been done in calling attention to the matter. The Committee, I may say, felt that they would not be justified in going into minute inquiries in the cases of individual banks, because they might periodically affect the interests of really sound banks. I agree that, as the Report sets out, if the provisions of the law are really carried out by Trustees, managers, and officers, there is ample security for depositors, but there is reason to think that there are cases, though I believe not many, in which the law is not observed, and that is really the danger of the position. In some cases the Trustees or managers have negligently allowed the officers to make entries or receive money without that supervision over them which the Act contemplates. What is, therefore, necessary is that there should be something in the nature of an audit, or independent inspection. In saying that I do not wish to throw discredit on the Savings Banks generally. I know that the large majority of them in the great towns, such as those at Liverpool, Manchester, Bradford, and Glasgow, are conducted with a degree of security and care which could not be excelled, but there are a number of smaller banks where the Trustees do not pay attention to the every-day business which is desirable. Now, the recommendation of the Committee is that there should be some audit, so as to secure that the provisions of the law are adequately carried out. The real crux of the thing is this -—that if the audit is to be a Government audit then there cannot be a doubt the Government will become responsible. If the audit is to be a Government audit it would be better that the business of the banks should be handed over entirely to the Government. But 550 all the Members of the Committee deprecated this, and I presume this is in accordance with the view of the Government themselves. The point, then, is how to arrange the audit independent of the Government, and yet for the Government to participate in it. The snggestion of the Committee is that the Board of Inspection or Audit should be of a thoroughly representative character, composed of members representing the Trustees, the depositors, and the Government, and I understand the Government have adopted this view. On the whole, I concur with the general lines of the Bill, which is framed on the recommendations of the Committee, and, so far as I am concerned, I regret that the Chancellor of the Exchequer has given way as much as he has done to the Trustees of the Savings Banks. I believe the Bill has thus been weakened, and the right hon. Gentleman must not be surprised if efforts are made in Committee to induce him to strengthen the Bill on those very points.

§ *(7.20.) MR. TOMLINSON (Preston)
As representing the views of some of the assenting parties to the concessions proposed by the Chancellor of the Exchequer at the meeting in the Conference Room, I desire to say that they only wish to have those concessions, as they understand them, embodied in the Bill. So far as I gathered the effect of the proposed modifications, as explained by the Chancellor of the Exchequer, they appeared to me to effect the objects of the proposals made in the Conference Room, except with reference to Clause 1, as to which I did not distinctly catch the words of the proposed Amendment. It appears to me that the best course that can now be taken will be to have the Bill read a second time, and then committed pro forma, in order to introduce the proposed Amendments, the re-committal being postponed, so as to allow of the Amendments being considered by those connected with the Trustee Banks. With regard to the last remarks of the right hon. Gentleman who has just sat down, I wish to say that those who are interested in Trustee Banks expect to have the whole of the Amendments embodied in the Bill, and will be satisfied with nothing less.

§ *(7.22.) SIR A. ROLLIT (Islington, S.)
I confess that at first the Bill prepared by the Government was not very acceptable to Savings Banks, but, taking a somewhat different view to that expressed by the right hon. Gentleman opposite, I am bound, on behalf of the great majority of Savings Banks, to thank the Chancellor of the Exchequer for receiving the deputation which a short time since I had the honour to introduce to him, and for framing the Bill in a way which, I believe, is acceptable to them. I have just received a message expressing the hope that no obstacle will be placed in the way of the Bill, which protects alike the public and the banks.

§ MR. STOREY
That is from Hull?

§ * SIR A. ROLLIT
Yes, they believe it to be an advantageous measure. I think that the attention of the House could hardly be directed to a more important subject, for no institution does more to teach thrift to the people, and to demonstrate its advantages to them, than Savings Banks. There is one feature in the Bill which I particularly approve, and that is that in future the position of the Trustees will be one of substantial reality, that they must attend a meeting, at least once a year, that they will be expected to also attend six meetings of the Committee of Management, that the nature of the connection of the Government with these institutions will be clearly set forth, and that the Committee of Audit or Inspection will be of a thoroughly representative character, representative of the views, experience, and interests of the banks on the one hand, and of the Government on the other. I welcome any precaution which will give additional security to these banks, and thus increase the confidence of the people in them. I cordially agree with the view of the hon. Member for Sunderland that the limitation of amount of deposit should be extended in the Savings Banks, for there ought to be free trade in facilities for saving rather than a regard for vested interests. Speaking for the Savings Banks generally, I welcome the Bill, and hope it will receive the unanimous assent of the House.

§ (7.28.) MR. T. M. HEALY (Longford, N.)
I wish——

§ * MR. SPEAKER
Order, order! The hon. Member has already spoken.

§ MR. GOSCHEN
I should like——

§ * MR. SPEAKER
Order, order! The right hon. Gentleman is in the same position, and cannot speak without the leave of the House.

§ (7.29.) MR. GOSCHEN
Yes, I am in the same position, but, with the leave of the House, I should like to say a few words in answer to the points which have been raised. In reply to the right hon. Gentleman the Member for Bradford, I may say the Government certainly do not contemplate wholly appointing the Committee or Board of Inspection; for their view is that it should be largely representative. With regard to Clause 11, it was dropped in order to get rid of the more contentious part of the Bill, and thus enable it to be passed into law this Session. If we are pressed on all sides, and in different directions, the fear would be that the Bill might be lost. The Bill, as a whole, is considered a valuable measure, and I do trust hon. Gentlemen will do their best in the spirit of compromise to assist the Government to pass a measure which only the hon. Member for Sunderland, I think, considers ought not to be passed. In reply to my hon. Friend behind me, I do not think it would be advisable at this period of the Session to refer the Bill to a Select Committee.

§ MR. STOREY
Will the right hon. Gentleman tell me whether the Savings Banks agreed to the withdrawal of the clause?

§ MR. GOSCHEN
No, Sir. I discussed with them the points to which they attached most importance. There was no argument with regard to this clause. It was a very small clause, and some compromise was made. Of course, I shall be prepared to deal with the point when it is reached.

§ (7.32.) MR. BARTLEY (Islington, N.)
I think hon. Members are really forgetting the exact circumstances. At present from £150 to £200 can be deposited in the Post Office Savings Bank or a Trustee Savings Bank. In the case of an ordinary family of five, that would enable one family to deposit £1,000. At that rate, if every one invested, we should have something like £70,000,000,000 invested. Therefore, instead of increasing the maximum, what we should endeavour to do is to induce people to invest in Consols, which are 553 equally secure, and have the advantage, or disadvantage, of rising and falling according to the prosperity of the country, and do not bear a fixed rate of interest guaranteed by a section of the community. While we ought not to raise the maximum, I do not think it ought to go forth to the world, seeing that a family can invest £1,000, that we wish to limit the savings of any individual family.