§ MR. WALROND (Devonshire, Tiverton)To ask Mr. Chancellor of the Exchequer if he will so alter the method of calculating the interest allowed to depositors in the Post Office Savings Bank as to prevent the expenditure of that bank exceeding the income; whether he is aware that the expenditure of the bank exceeded the income for the year 1903 by £107,403, for the year 1904 by £112,090, and for the year 1905 by £88,094; whether he would consider the suggestion that this annual deficiency might be turned into a surplus of over £100,000 per annum if the rule as to interest was so altered as to allow 2½ per cent, only on sums left in the bank for a complete calendar year, but sums left in the bank for a period of one or more complete months less than a year to receive 2 per cent.; and, if he is not prepared to consider a preferential difference of a half per cent, in the rates of interest, according to the stability of deposit, will he consider a preferential 592 difference of a quarter per cent, with the view of making the Post Office Savings Bank pay its way.
(Answered by Mr. Asquith). The Select Committee of 1902 on the Savings Bank's Funds recommended a reduction in the rate of interest allowed to depositors with a view to balancing the income accounts of the funds. The question was discussed in this House on 15th March, 1904, and the general opinion was then clearly against such a reduction. The late Chancellor of the Exchequer on that occasion expressed his hopes that, owing to the rise in the prevailing rate of interest which had taken place since the date of the Committee's inquiry, it might be possible in the course of a few years to reduce very considerably the deficiency of income without altering the rate paid to depositors. Monetary conditions have not in the meantime altered in such a way as to weaken that expectation, and I see no reason to depart from the decision then adopted.
§ MR. WALRONDTo ask Mr. Chancellor of the Exchequer whether he will have a Return prepared for the Post Office Savings Bank showing the amount of money contained in excess of the £200 limit by those balances which have exceeded that limit by accumulations of interest, and on which excess no interest is paid to depositors, with the object of keeping such excess in actual gold as a small gold reserve for the Savings Bank.
(Answered by Mr. Asquith). The aggregate of the amounts in excess of £200 is considerably increased on 1st January in each year by the crediting of the interest which has accrued during the preceding year. It diminishes throughout the year owing to withdrawals from the accounts, and in December it is reduced to a comparatively small sum. It is estimated that the average sum of which the Savings Bank thus has the use, without paying interest upon it, is approximately £240,000, representing at 2½ per cent, a saving of about £6,000 per annum in interest paid. I do not think that the suggested application of this sum to the purposes of a gold reserve would be practicable.
§ MR. WALRONDTo ask Mr. Chancellor of the Exchequer whether he will consider the advisability of, without any expense, providing a reasonable gold reserve for the Savings Bank funds, and, at the same time, meeting the wishes of a large number of depositors by extending the present statutory maximum limit of deposit, namely £200, stipulating that the excess of money over £200 should bear no interest whatever and should be kept as a gold reserve.
(Answered by Mr. Asquith.) I am not prepared to recommend an extension of the maximum limit of deposit, nor am I aware of any general desire for the opportunity of depositing money in the Savings Banks without interest.