§ Considered in Committee.
§ [Mr. JOHN ELLIS in the Chair.]
*THE CHANCELLOR OF THE EXCHEQUER moved:—
That it is expedient to authorise the charge on the Consolidated Fund of an annuity of £65,000 (beyond the present amount of £150,000 authorised by the Indian Army Pension Deficiency Act, 1885) towards discharging the liability of the Consolidated Fund in respect of certain Indian Army Pensions; and to provide that the rate of interest for any money lent after the 1st day of April 1896, under Section 5 of the said Act, shall be such as the National Debt Commissioners may determine
§ MR. D. LLOYD-GEORGE (Carnarvon District)
asked that some explanation should be given of the Motion.
§ * THE CHANCELLOR OF THE EXCHEQUER
said he did explain the matter in introducing the Budget, but he would be happy to give the explanation again. Up to 1884 India discharged her liability for that part of our soldiers' pensions which was earned by 453 service in India by the payment of a capital sum calculated on the probability of the lives of the pensioners. In 1884 it was discovered that, owing to delay in the calculations, to the omission to calculate some pensions which fell due before 1870, to the calculations being based on too high a rate of interest, and to the fund not having been properly invested, the fund was practically bankrupt, and there was nothing left to bear the charges of the pensions of soldiers which it was necessary should be borne. By an Act of 1885 Parliament set up an annuity of £150,000 for 60 years on which the Commissioners of the National Debt were authorised to borrow sufficient sums to pay the pensions as they become due, but it had been found lately that the calculations on which that annuity was based were themselves defective, and that in a very short time, if the fund was allowed to go on as now, it would become bankrupt, and there would be nothing left with which to pay future pensions. It was, therefore, necessary to provide a fresh annuity of £65,000, to close in 1941. What had happened was, of course, the fault of their predecessors, and they had no option in the matter. The provision of this annuity was an essential part of the finance of the year, and a clause would be founded on the Resolution which, according to recent practice, would be included in the Finance Bill.
§ Resolution agreed to; to be reported to-morrow.