HC Deb 09 July 1907 vol 177 cc1438-9
MR. SWIFT MACNEILL

I beg to ask Mr. Chancellor of the Exchequer whether he is aware that a considerable proportion of the deposits in the Post Office Savings Bank belongs to persons in the well-to-do classes, attracted by a higher rate of interest, including compound interest, than can be obtained outside the Savings Banks for deposits repayable on demand, and this although the deposits in the Savings Banks are guaranteed by the State; and, seeing that the terms on which the business of the Post Office Savings Bank is conducted have resulted in a depreciation in the value of the securities held against the deposits and an annual loss in the income account, such loss amounting for the year 1906 to £119,870, which loss falls on the general taxpayers, does he purpose to take measures to correct this abuse of the Post Office Savings Bank.

THE CHANCELLOR OF THE EXCHEQUER (Mr. ASQUITH, Fifeshire, E.)

Inquiries which have been made from time to time do not bear out the conclusion that any large proportion of the deposits in the Post Office Savings Banks belong to classes other than those for whose benefit the Banks were intended. Whatever may have been the case in past years, the present difference between the Savings Banks rate of interest and the rates obtainable elsewhere is not likely to operate unduly to divert moneys to those Banks. I do not think that the terms offered to Savings Banks depositors can be held accountable for the depreciation in the value of Government securities. As regards the deficiency of income —although it was increased by special causes last year—I am not without hope that it may be very materially reduced in the near future, owing to the more remunerative investments now available for the Fund. And in any case it has to be remembered that from 1861 to 1895 the Post Office Savings Banks business was conducted without any loss of income being incurred, that in the later years of that period the surplus income was paid to the Exchequer, and that on balance the Exchequer has gained more than it has lost in connection with the Post Office Savings Batiks.