HC Deb 17 June 1904 vol 136 cc394-404

As amended (by the Standing Committee), considered.

MR. WEIR (Ross and Cromarty)

said he had put down a clause in order to show a way of increasing the Post Office revenue by at least £25,000 a year. The Post Office Savings Bank had been established for the purpose of encouraging thrifty and frugal habits amongst the working classes. No charge had hitherto been made on withdrawals from the Post Office Savings Bank, and he thought that a small charge of this kind would tend to encourage thrift, as it would be a slight deterrent against hasty withdrawals; and considering that there were six million withdrawals in the course of the year there would be a contribution to the Exchequer of £25,000. It would mean very little to the withdrawers, but would mean a great deal to the Treasury and would have a tendency to keep deposits in the Savings Bank.

A clause (Charge on Withdrawals). The Postmaster General shall be entitled to make a charge of one penny on payment of each withdrawal from the Post Office Savings Bank, and such charge shall be collected by means of a penny stamp affixed to the withdrawal order at the time of payment."—(Mr. Weir.")

Brought up, and read the first time.

Motion made, and question proposed, "That the clause be read a second time."

THE CHANCELLOR OF THE EXCHEQUER (Mr. AUSTEN CHAMBERLAIN, Worcestershire, E.)

said he appreciated the desire of the hon. Member to find additional public revenue, but doubted if the clause would assist the object of encouraging thrift. What did give that encouragement was the knowledge a depositor had that at short notice and without charge he could withdraw his savings. A provision such as was proposed would cause irritation to depositors, and its effect would rather be to deter people from depositing in Post Office banks if their savings would be penalised in a manner from which depositors in other savings banks would be exempt. He was sure the hon. Gentleman did not wish to penalise depositors in the Post Office Savings Bank; and he hoped he would withdraw the clause.

MR. CALDWELL (Lanarkshire, Mid.)

said he quite recognised the force of what the Chancellor of the Exchequer had said. As a matter of fact, the hon. Gentleman and the Chancellor of the Exchequer had practically the same object in view—namely, to stimulate thrift among the people. The hon. Gentleman thought that that could best be done by putting a little impediment on withdrawals; and he argued that if a man wanted to take out a shilling, and found he had to pay a penny in doing it, that that would act as a deterrent. There was a great deal of force in that. But there was also a great deal of force in what the Chancellor of the Exchequer said. As the clause would act one way with one class of the community, and another way with another class, perhaps it would be better to leave the matter where it was.

MR. WEIR

said he had no desire to press the clause, and would withdraw it.

Motion and clause, by leave, withdrawn.

MR. WEIR

said that the clause he now desired to move embodied a scheme which would be an undoubted advantage to depositors. He had no doubt that the officials of the Department would oppose it. They always opposed new schemes. At the present time, if a man wished to withdraw I £10 from the Post Office Savings Bank he often had to wait three or four days for it; and if he happened to live in the Highlands or in remote parts of I Ireland he would probably have to wait a week or even longer. He wanted to get rid of that delay. At present if a man wanted to withdraw money at once he had to telegraph for it, and prepay a reply, at the average cost of fifteen pence. That information was given him by the right hon. Gentleman when he represented the Postmaster-General in this House. Under the proposed scheme every depositor, could, if he wished, obtain eight withdrawal orders, from the Head Office, which he could cash at any Post Office Savings Bank by producing his deposit book and affixing his signature to the order. He would thus be able to get the money he required at once without paying fifteenpence for a telegram. What an advantage that would be. A workman might be moving about looking for a job, and having withdrawal orders in his pocket could get one cashed at once without awaiting correspondence by post and losing two or three days. He hoped the right hon. Gentleman would accept the clause, notwithstanding the attitude of the permament officials who tried to influence the Postmaster-General. The scheme he proposed was a feasible scheme, and would be an undoubted advantage to the vast number of depositors in the Post Office Savings Bank who might require to withdraw money at once. It might be said that the scheme would affect ordinary banking business. He could never understand why the Post Office was so concerned about the interests of banks. This was not a case of transferring money to another person; it was merely repaying money to a depositor, and could not therefore affect the banking interest in the slightest degree. He, therefore, hoped that the right hon. Gentleman would not advance the old argument that the scheme would interfere with the business of the banks. It might be said that the scheme would encourage fraud; but a person might, at any time, get hold of a depositor's book and obtain money by forging the depositor's name. Under the scheme, there would be no more risk of fraud than existed at the present time. He had suggested orders of the value of 10s., 153., £1 or £2; but he would not object to the amounts being altered in any way the right hon. Gentleman desired. Under the scheme a depositor could get his money easily and cheaply; and the commission to be charged would bring revenue to the Department without any additional trouble. He begged to move.

A clause (Regulation in regard to withdrawal orders). The Postmaster-General may by request of a depositor in the Post Office Savings Bank issue against money standing to the credit of such depositor a hook containing eight savings bank withdrawal orders, each order to be of the fixed value of ten shillings, fifteen shillings, one pound, or two pounds; and payable at any Savings Bank Post Office in the United Kingdom, on the depositor producing his deposit book, and affixing his signature to the order. It shall be lawful for the Postmaster-General to debit the account of any such depositor with the sum of one shilling as representing a commission of three halfpence on each order. (Mr. Weir.)

Brought up, and read the first time.

Motion made, and Question proposed, "That the clause be read a second time."

MR. AUSTEN CHAMBERLAIN

said he regretted the hon. Member's criticisms of the officials of the Post Office, and in particular the officials of the Savings Bank Department. No Department of the public service was managed with greater skill or economy, or care for the public convenience than the Post Office Savings Bank; and there was nothing comparable to the work it accomplished in this or any other country. To be able to open an account in any one of the thousands of offices where savings bank business was transacted, and to be able to withdraw money at any other of these offices, required in itself an efficient organisation, which showed how well the work was being carried on. He thought the hon. Gentleman was under a misapprehension. In this clause the hon. Member went in a directly contrary direction to his intention in his last proposal. In that he desired to deter depositors from withdrawals, in this he offered facilities for withdrawing in a hurry. The cost of withdrawing by telegraph was not 1s. 3d., but 9d., except in cases where a telegraphic reply was required, and these cases were a very small proportion of the total number of withdrawals. The hon. Gentleman had on previous occasions commended this scheme to the attention of the House in the form of Questions addressed to the late Mr. Hanbury. The scheme was, he believed, originally propounded by a Mr. Lupton; and was carefully considered by the Post Office authorities. It was that, in addition to all present means of withdrawal, a depositor should be allowed to withdraw a sum not exceeding £16 through the medium of postal orders to be cashed as he desired at any post office. The organisation of the scheme proposed that while the depositor would be charged 1½d. on each order, he should continue to be credited with the interest on the amount until the orders were cashed. Instead, however, of simplifying the transaction, that would double, and more than double, the work of the Department in regard to each transaction. The very flr3t result would be that for every letter now in use—and they numbered 20,000—new letters would have to be substituted. Complications would also arise in reference to interest, and there would be difficulty in the depositor knowing exactly the state of his account at the end of the year. Further, the way in which the accounts were kept did not lend itself to this scheme. He could assure the hon. Gentleman that according to the best information he could obtain, instead of increasing the revenue of the Post Office, the scheme would cause very considerable extra expense and trouble. What would happen in the case of orders which were not presented within the limit of three months the clause did not state. If they were to be subject to the ordinary rule regarding postal orders, that would introduce a new complication and would cause a great deal of natural irritation to depositors who had taken out such orders, and found that, at the end of three months, they could not be cashed. Under all the circumstances, he could not accept the clause; and he hoped the hon. Gentleman would not press it. After all, as the hon. Member himself said, the object of the Post Office Savings Bank was to promote thrift. It was not, however, intended that a depositor should use the Post Office Savings Bank for the purposes of an ordinary current account. The Post Office Savings Bank was established to encourage thrift; and their efforts should be directed to securing it. He could not accept the clause. Its working would be difficult and costly; and he did not think it would be desirable to introduce such an innovation into Savings Bank practice.

MR. CALDWELL

said that it was understood that Post Office officials were very partial to their own views with regard to postal arrangements. With reference to the Savings Bank Department there was, however, a great deal in what the Chancellor of the Exchequer had said; and he noticed himself in the last Post Office Report that that Department had been able to produce a very considerable surplus. With regard to the clause, he thought there was a great deal in the idea. He quite agreed with what the right hon. Gentleman the Chancellor of the Exchequer had said, that interest could not be paid on every little thing of that kind. At the same time it would be a great convenience to get an order of the kind payable at any post office. With regard to what had bean said about it not encouraging thrift, he would point out that a man would only get a withdrawal order as a matter of precaution. A man travelling about might want to take more money than he required, and in such a case he would instead of taking bank notes take a withdrawal note and only cash it if required. There was a great deal to be said in favour of a scheme of that kind, especially on behalf of the working and other classes who when travelling wished to have command of money, but who did not wish at the same time to withdraw it from the bank. He quite recognised that it was not a scheme that could be earmarked by the House in this Bill, nevertheless he thought it was a scheme which should be placed before the Chancellor of the Exchequer, and the best opportunity of drawing attention to it was when this Bill was brought before the House. The clause had answered its purpose, and he therefore hoped his hon. friend would not persist.

SIR GEORGE BARTLEY (Islington, N.),

while recognising that the scheme as it stood would not work, thought it was one which deserved careful consideration. There was no doubt that there was considerable delay, and he was satisfied that small people did not put money into the Post Office Savings Bank because of the difficulty of getting it out. The best way to encourage thrift was to make it easy to draw money out. In London there was very little difficulty, but in outlying districts it was different, and if there were some document by which a man could, on proving his identity, get a withdrawal at the next post office without the circumlocution of sending up to London it would be a useful reform. If the right hon. Gentleman would consider some scheme by which that difficulty could be met he would make the Post Office Savings Bank much more popular.

Question put, and negatived.

MR. WEIR

said the right hon. Gentleman had shown a great desire to safeguard the depositors in every possible way and to encourage thrift, and that being so, the clause lie (Mr. Weir) now proposed was that the Post Office should convey all the correspondence of the Post Office Savings Bank at a fixed charge of £50,000 against the cost of management. If £50,000 was too much let them make it £10,000 less, and if it was not enough let it be £10,000 more, but let there be a fixed charge for the conveyance of this correspondence and not a different amount every year as at present. He begged to move.

A clause (Maximum cost of Post Office Savings Bank postage). In page 5, after Clause 12, to insert the following clause, 'The Postmaster-General shall convey all correspondence on behalf of the Post Office Savings Bank at a uniform charge of fifty thousand pounds per annum against the cost of management.'"—(Mr. Weir.)

Brought up, and read the first time.

Motion made and Question proposed, "That the clause be read a second time."

MR. AUSTEN CHAMBERLAIN

opposed the clause. At the present time, he said, the Exchequer was not making any profit out of the Savings Banks account; on the contrary, it was incurring a heavy loss. One of the objects of the Bill was to reduce that loss so that it might not be necessary to reduce the rate of interest to depositors. If, however, the Amendment were carried, the present cost to the Exchequer would be increased, because the charges now were considerably in excess of £50,000. It had always been the opinion of the Treasury, and he believed the policy of the House, that the Savings Banks should be charged by the Post Office with the fair cost of the work that was done for them, and in making that charge all the part which would in the ordinary way represent profit was deducted. Thus the Post Office made no profit out of the Post Office Savings Banks, though it made no loss. He saw no reason for departing from the present system.

MR. CALDWELL

said he did not understand why, if the right hon. Gentleman was so anxious to reduce the charges against the Savings Bank, he did not accept this clause.

MR. AUSTEN CHAMBERLAIN

said the Treasury had to find the money any way, and he did not wish it to be said that the Savings Banks were charged £20,000 or £30,000 less than they really were.

MR. CALDWELL

said it was a matter which could not be properly discussed at that time. There was no doubt this was a Bill which ought to have been brought in by the Government, and he recognised the friendly disposition of the right hon. Gentleman with regard to it, but it was quite obvious the clause would not be accepted, and he hoped his hon. friend would be satisfied with the reasons which had been given.

MR. WEIR

said he had no desiie to occupy the time of the House at this hour and therefore would withdraw the Amendment.

Motion and clause by leave, withdrawn.

MR. CALDWELL

said his Amendment was to leave out from the word 'appointment' in Clause 1 down to the end of the clause. All the officers of the Savings Banks had to give security for their good conduct. Among those officers was the auditor, who had to make statutory balance-sheets which were placed in the books. Supposing that auditor disappeared and the balance-sheets were false balance-sheets they had no security. Everyone else had to find security against misconduct.

Amendment proposed to the Bill— In page 1, line 8, to leave out from the word 'appointment' to end of clause"—(Mr. Caldwell.)

Question proposed, "That the words proposed to be left out stand part of the Bill."

SIR ALBERT ROLLIT

said that out of respect to the spirit the hon. Member had shown not to finally impede the progress of this Bill he was prepared to accept the Amendment in the hope that it would facilitate the passing of the Bill on that the last day. In his view the best way to meet the question of the auditor was not by requiring him to give security, but by requiring the trustees of the bank to be most careful in their selection. The Bill provided that the office of auditor should only hold for one year, so that a change might be made in the auditors if it was deemed desirable. He appealed to the hon. Members for Mid-Lanark and Ross and Cromarty to allow the Bill to pass in the interest of the promotion of thrift. If they would do that he would confer with them, and if in any other direction he could make similar concessions he would be only too happy to do so.

MR. WEIR

said he should be only too glad to accede to the wishes of his hon. friend. He recognised that, so far as the Bill applied only to trustee savings banks, it was a good Bill, but the Chancellor of the Exchequer had tacked on. to it most objectionable clauses affecting the Post Office Savings Bank, and if the hon. Member wanted his Bill to pass he should induce the right hon. Gentleman to withdraw those clauses.

Question put, and negatived.

MR. CALDWELL

said there was just one question which he thought was the most vital question of all. He regarded Clause 3 of the Bill with the greatest possible objection. It was really that clause to which he objected most. This Bill was going to give them a pension scheme. It was to be given to every officer—it was in the entire discretion of the trustees of a savings bank to grant it to any officer of a bank who became unable to discharge his duties through illness or age without any regard to length of service. If there was to be a pension scheme it should be under another Bill altogether. He begged to move.

Amendment proposed to the Bill— In page 1, line 21, to leave out Clause 3."Mr. Caldwell.)

Question proposed, "That the words of the clause to the end of line 24, page 1, stand part of the Bill."

SIR ALBERT ROLLIT

said could not accept the Amendment.

MR. AUSTEN CHAMBERLAIN

said if he might make a suggestion he would suggest that the National Debt Commis- sioners should be substituted for the Inspection Committee which would result in the limitations of the Superannuation Acts being enforced.

MR. CALDWELL

said that that would still leave the objectionable principle of superannuation in the Bill. He would suggest that the clause should be withdrawn and the question at issue left open for further negotiation.

SIR ALBERT ROLLIT

hoped that that course would not be taken at this

MR. AUSTEN CHAMBERLAIN

said that if the Bill were to be allowed to go through the objections of the hon. Member for Mid-Lanark might be satisfied by Amendments moved to the Bill in the House of Lords.

MR. WEIR

said he could not allow the Bill to pass without some consideration of the clauses added to it by the Chancellor of the Exchequer. He was very much disappointed that the right hon. Gentleman had taken no notice of the points which he had raised.

And, it being half-past five of the Clock, further consideration of the Bill, as amended, stood adjourned.

Bill, as amended (by the Standing Committee) to be further considered upon Monday next.