NEW CLAUSE.—(Provisions as to Commutation.) (Hansard, 3 February 1913)

HC Deb 03 February 1913 vol 47 cc1829-83 1829

§ After Clause 17, insert the following Clause:—

§ If before, or within one month after, the date of Disestablishment the representative body signify by notice in writing to the Welsh Commissioners that they have adopted the scheme of commutation hereinafter set forth, the following provisions shall have effect:—

(a) As from the date of Disestablishment or of such notice, whichever is the later (hereinafter referred to as the date of commutation), the existing interests of the holders of all ecclesiastical offices in the Church in Wales in all property (other than burial grounds) vested in the Welsh Commissioners and by them to be transferred to the county councils or the University of Wales shall determine; and the provisions of this Act respecting existing interests in such property, and the payment of money in substitution for and in satisfaction of such interests, and respecting the right of the representative body to require the transfer to them of glebe or other land subject to the payment of the value thereof, and respecting the liability of the existing holders of ecclesiastical offices to pay tenths, shall cease to have effect:
(b) The Welsh Commissioners shall, as soon as may be after the date of commutation, pay to the representative body the aggregate value of the existing interests of holders of ecclesiastical offices in the Church in Wales in such property as aforesaid, being offices held by freehold tenure or any tenure which, in the opinion of the Welsh Commissioners, is in practice equivalent to freehold tenure, such value to be ascertained in manner provided by the Fourth Schedule to this Act, together with interest on that amount at the rate of three and one-half per cent, per annum from the date of commutation of the date of payment: 1830 Provided that, if the representative body so requests, the Welsh Commissioners shall transfer to the representative body any glebe or other land (not being a burial ground) vested in them in part satisfaction of the sum so payable, the value of such land to be settled in default of agreement by arbitration;
(c) The Welsh Commissioners shall, in addition to the amount payable under the last preceding paragraph, pay to the representative body towards the costs of administration a sum equal to two and one-half per cent, of that amount:
(d) The Welsh Commissioners shall, on the request of the representative body, from time to time make payments on account of the sums so payable to the representative body, not exceeding at any time the amount then received by or due to the Welsh Commissioners as income from the property vested in them and to be by them transferred to the University of Wales and county councils, and such payments on account shall be treated as having been made on account of interest and not on account of capital, except so far as any sum paid on account is found to have been in excess of the interest due at the date of the payment on account;
(e) The holder of any ecclesiastical office in the Church in Wales which is held by freehold tenure, or by any tenure which in the opinion of the Welsh Commissioners is in practice equivalent to freehold tenure, shall, subject to any arrangements which may be made between him and the representative body, be entitled, in lieu of his existing interest in such property as aforesaid, to an annuity calculated in manner provided by the Fifth Schedule to this Act so long as he continues to hold an ecclesiastical office in the Church in Wales; and any question as to the amount thereof shall be determined by arbitration;
(f) Every annuity payable under this Section shall be charged on the property for the time being vested in the representative body, and shall be treated as part of the emoluments of the ecclesiastical office which the annuitant held at the passing of this 1831 Act; and accordingly, where the interest of the annuitant in the emoluments of his office was at the date of commutation subject to any incumbrance, the incumbrancer shall have the same rights as nearly as may be against the annuity as he has against the other emoluments of the office, and any curate licensed before the passing of this Act to serve under the annuitant, shall, so long as the annuitant holds his existing office, have the same rights against the annuity as he has against the other emoluments of the office;
(g) The annuitant shall continue liable to repair any ecclesiastical building which he would have been liable to repair if he had retained his existing interest in such property as aforesaid;
(h) Nothing in this Section shall affect the right of the holder of an ecclesiastical office to an annuity on resignation conferred by this Act, but the whole of such annuity shall be payable by the representative body. —[Mr. McKenna.]

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

§ Sir A. GRIFFITH-BOSCAWEN
I am rather surprised that the Home Secretary has not offered us some explanation of this new Clause I think an explanation of his present proposals should have been given, because they differ very materially from those brought forward by my hon. Friend opposite, the Member for Kilmarnock (Mr. Gladstone), which we discussed a few weeks ago in Committee, and which I then had the privilege of seconding. These proposals are very largely different and are less favourable to the Church than the proposals which were then made and we have now to consider our attitude towards this matter of commutation as proposed by the Home Secretary. At the risk of repeating what I said on a previous occasion, I should like to make this observation, that in our view the plan of commuting the life interest is far more advantageous to the State than it is to the Church. It is far more advantageous to the State because it will enable the Welsh county councils and other bodies to wind up the affairs of the Church at once, and they would be able to make complete schemes for the administration of this money without waiting until one vacancy occurred later on. Instead of 1832 waiting parish by parish to deal with this money, they would have a lump sum which they could administer at once. The question arises whether the Church would be willing to enter into a business arrangement of this sort. I venture to say, and I think I will command the assent of my hon. Friends on this side, and indeed the assent also of Liberal Churchmen and others opposite, that the whole question was one of terms, and unless you give to the Church sufficiently good terms so that she can enter into this business without risk the Church will not accept a commutation scheme, which would be particularly for the advantage of the State. What are the terms which we have now to consider I We on this side have taken expert advice on the terms now offered by the Home Secretary, and I think it right to say at once so far as I am concerned, and I think I am speaking for the great bulk of opinion on this side of the House, that we cannot accept the new Clause in the form in which it is moved by the Home Secretary. Our view is this—the terms are such that the Church would undoubtedly be landed in a big loss. The risk is too great under the terms offered by the Home Secretary, and unless therefore he is prepared to very substantially modify the terms he has proposed, there will be nothing for us to do but to vote against this Clause, because we feel it would be infinitely preferable for the Church not to have a commutation scheme at all than to have this one which she is asked to accept.
What will be the position? The scheme is optional and not compulsory on the Church. The Church would be in an exceedingly awkward position if, with a scheme of this sort in the Bill, she refused to accept it. It would be open to the Welsh county councils, some of whom may be very hostile to the Church, by means of what I might call administrative friction, to make the position of the Church absolutely intolerable if she refused to accept the scheme. If the Church did accept the scheme on the lines proposed by the Home Secretary, there would be great risk of considerable loss. The point to which we take exception, and I have no doubt that the Home Secretary has anticipated this, is that the commutation is to be made on a 3½ per cent, basis. I cannot understand why the Home Secretary, after the Debate we had the other day, has put in a 3½ per cent, basis. He must have remembered the very able and con- 1833 clusive speech of the right hon. Gentleman the Member for the Spen Valley Division (Sir T. Whittaker), who we all recognise as an expert in these matters, in which he said that no single insurance company he knew would enter into a scheme of this sort on a 3½ per cent, basis. Let the House remember the difference between an insurance company and the Church in a matter of this sort. Insurance companies undertake an annuity system as part of their general business. They do not exist merely for the sake of creating annuities. I am informed that it is not a part of their general business that pays very well in itself; on the contrary, it is more or less a by-product, and its use is largely a matter of advertising and getting the company and its operations known. The right hon. Gentleman the Member for the Spen Valley Division granting that, and also that the insurance company docs a great deal of other business besides annuity work, said that even having their staff existing for other purposes they would not enter into a scheme like this on a 3½ per cent. basis. Take the case of the Church. The Church under this scheme will be acting as an insurance company, but simply and solely for the purpose of annuities. Having regard to the fact that the basis is 3½ per cent., and that the Church is dealing with a special class of lives, whereas insurance companies take all lives, it would be impossible for the Church to undertake this scheme without a very grave chance of loss, and I Hank, therefore, that the representative body will undoubtedly, on the present terms, refuse the scheme put forward by the Home Secretary.
Let me point out to him, because I think this point was missed the other day, where the loss would come in. The Home Secretary, in his speech the other day, assumed all through that the Church could invest her money at 3½ per cent., and he suggested that therefore there would not be a loss. I would point out that the loss would very likely come in on the realisation of securities in order to pay the annuities. Let me put the figures to the Home Secretary. He mentioned that the total capital sum would probably be £2,000,000. Three and a half per cent, on £2,000,000 would bring in £70,000 a year, but the annuities in the first year would amount to £160,000, and it follows that there would be a loss of £90,000 in the first, year. Ninety thousand pounds worth of capital would have to be realised in order 1834 to pay the annuities. Supposing there is a fall in securities. When you suddenly have to realise an enormous sum like £90,000, is it not probable that there would be a considerable loss? If there should happen to be causes operating in the money market which bring about a general depreciation of securities, the loss might be very heavy indeed, and that loss would continue year after year, very likely until the the last annuity had been paid off. I know the argument the Home Secretary used. He said that the Church would be able to obtain additional subscriptions to a sufficient amount to prevent it being necessary to sell securities in order to pay the annuities each year, but I put it to him, Is that a fair way of treating the Church? You are relying upon getting additional subscriptions to make up the deficiency. Surely the only fair way of dealing with the matter is to give the Church a sound scheme to start with, so that there will be no risk of loss. When the Home Secretary says that because in the case of Ireland there was no loss, because large subscriptions came in from the first, and it was not necessary to realise, therefore the same thing would happen in Wales, he is not comparing like with like. Although it is to be hoped that a large, subscription would come immediately from the Church, the Home Secretary has no right to trade upon that. He ought to give us a perfectly sound financial scheme ab initio. under which there would be no loss to the Church.
4.0 P.M.
Even in the case of Ireland the Irish Representative Body had to realise capital money to the extent of £l,500,000. The conditions in the case of Ireland were such, and the state of the money market and the value of securities was such, that there was no loss. In the case of Wales you have not put it upon a fair basis, and we therefore claim that the loss may be very heavy, and we are not prepared, so I am advised by those who have gone into the scheme, to take this risk, and the Church will not be prepared to accept the option and adopt the scheme unless it is materially altered. The 3½ per cent, basis is the chief cause of objection. The right hon. Gentleman will remember that in the plan put forward by the hon. Member for Kilmarnock the basis was a 3 per cent, basis, and, if I remember aright, the right hon. Gentleman, the Member for the Spen Valley Division said that he thought that in order to make the scheme actuarialy 1835 sound, it ought to be upon a 3 per cent, basis. There are one or two other points in the scheme which in our opinion are not fair, and which would involve the Church in loss. The hon. Member for Kilmarnock suggested 5 per cent, for the cost of management. The Home Secretary suggests 2½ per cent. I am advised that that is insufficient, having regard to the fact that for this one business alone the Church would have to have a very expensive staff of actuaries. There, again, there would be a loss on the 2½ per cent. for management. Another point is that in estimating the commutation value of tithe rent-charge the Home Secretary makes a deduction of 12 per cent, for rates and Land Tax. It is rather curious that in the form in which this Clause was first put down 8 per cent. was the figure given, but since the White Paper was circulated the Home Secretary has altered that to 12 per cent. I do not know why he has taken this very large figure as the proper deduction for rates and Land Tax. I am advised it is altogether too large, and that there would be a considerable loss on that too. It represents a bigger deduction than the average outgoings for rates and Land Tax now paid by the Church, and I suggest to the Home Secretary that it would be far more fair to do what is done in the Fifth Schedule, namely, take the actual amount of the deductions in the last three years on (he average. You have to arrive at that for the purpose of the Fifth Schedule, and for the life of me I cannot see why it should not be put into the Fourth Schedule, so that we can get not merely an estimate of what these deductions ought to be, but the actual amount as ascertained on the average of the last three years. We are driven back therefore to this position: Churchmen in this House and in the country would like, on general principles, a scheme of commutation. We do not want to keep up friction between the clergy and the Welsh county councils for a day longer than is necessary. We realise that this Bill will produce a vast amount of religious bitterness. We do not want to intensify that; we want to minimise it if we can, and for that reason we think commutation would be an advantage both to the State and to the Church. But commutation must be judged upon its terms, and if you offer to the Church terms which, in the opinion of leading actuaries who have been consulted, in the opinion of men like the right hon. 1836 Gentleman (Sir T. Whittaker), in the opinion of men like the hon. Member (Mr. Gladstone), and of officers of the Church like the officers of the Ecclesiastical Commission and Queen Anne's Bounty, might land the Church in a serious loss, we would do far better without commutation than with it. Therefore, though for my part on general grounds I certainly should desire to see a commutation scheme in the Bill, this is not a fair commutation scheme. It would be better for the Church not to have one at all than to have one which, if it is in the Bill, we shall have to refuse later on. For these reasons, unless the Home Secretary can see his way materially to modify his proposals, I hope he will either withdraw them or that the House will reject them.

Mr. LLEWELYN WILLIAMS
There is one observation which was made by the hon. Gentleman with which I agree, that is that the proposals made in this new Clause for commutation are not fair proposals. When we come to consider this question of commutation there is one fact that we must keep in mind, and that is that the proposals are optional for the Church, but they are not optional for the Welsh people. We know that in another place it will be possible, and indeed it is almost certain, that Amendments and alterations will be proposed in this commutatoin proposal, all in the interests of the Church. There will be no one to move any alterations or Amendments in the interests of the Welsh people, and if such an attempt is made we all know that it will be abortive. If and when this Hill becomes law, and if the Church accepts these proposals for commutation, as accept (hem she will, in spite of what the hon. Gentleman has just said, because I do not believe for a moment that her advisers will be so blind as to pretend that they are not to the real advantage of the Church, the Welsh people will have no option but to accept them too. The people of Wales have never been asked to accept commutation. In the Bill of 1900, and in this Bill when it was introduced, nothing was said about commutation. Indeed, the framework of the Bill, as I thought, was against the very idea of commutation. The Chancellor of the Exchequer will remember the great demonstration that took place on Whit Monday when he was at Swansea. Over 100,000 people came from all parts of Wales to show their support of this measure, but the measure itself had no commutation proposals in it at all. Therefore the only 1837 Bill which has been discussed and approved by the people of Wales is one without any commutation proposals. I do not say that on that account this House is precluded from considering, and even from passing, a measure of commutation, but I appeal to my hon. Friends around me to be very careful in the way they move in this matter in view of the fact that the Welsh people have never been, and never will be, consulted about the terms of commutation, and to see to it that in their proposals the interests of the people of Wales shall not be unduly sacrificed.
We are all in favour of commutation, and it is only a question of terms. Commutation is, or should be, a business proposition based on actuarial calculations as to what is the real value of the life interests of the clergy in Wales. But when it comes to putting commutation into practice, I agree it is not so simple a matter, because hon. Gentlemen opposite, who are champions of the Church, quite naturally want to guard the Church against all risk, and then, once you enter into this cloudland of conjecture, opinions must vary very considerably. The only precedent we have for commutation is the precedent of the Trish Act of 1869, because in 1536, when the monasteries were dissolved, in 1559, when the Act of Uniformity drove out hundreds of Catholic priests from the Church, including two Welsh bishops, when the Act of 1662 drove 2.000 ministers out of the Church, and when in 1690 the Anglican Church was Disestablished and Disendowed in Scotland, no regard was paid to the life interests of the dispossessed clergy, and therefore no commutation proposals were made. Therefore, the only precedent we have is the precedent of 1869. Some three weeks ago the Home Secretary said that this Bill as it stands leaves the Church £103,000 a year of Disendowments. The Bill of 1869, as it left this House, did not leave a penny of the Endowments of the Irish Church. It is true that £500,000 was afterwards given to it in lieu of the private benefactions, but that was under pressure of the House of Lords, and it was done very reluctantly by Mr. Gladstone. We are entitled to keep that in mind when we come to discuss these commutation proposals. How do they compare with the commutation scheme of the Irish Act? We all know that that scheme was preposterously generous to the Church in Ireland. It has always been acknowledged on this side of the House, and I 1838 am not sure that there are not many Gentlemen on the other side who agree with it. The 12 per cent, bonus, as it has been called—I agree loosely and inaccurately—in the Irish Church Act was not in the Bill as it left the House of Commons. That, again, was accepted by Mr. Gladstone very reluctantly at the last moment, merely in order to induce the House of Lords, which had not then been muzzled by a Parliament Act, to accept the: Bill. We have a Parliament Act, and yet we have to pay exactly the same price to-day and more than was paid by Mr. Gladstone in 1869.
The 12 per cent, bonus was divided really into two parts. Seven per cent was the difference between computing the commutation sum on the ordinary life insurance annuity tables and computing it on the life of the clergy. The right hon. Gentleman (Sir T. Whittaker) a year ago said that 7 per cent, was considerably under the proper figure, and if the word "considerably" means anything, I suppose it means something substantial. I suppose, therefore, he will agree that it really should be represented not by 7 per cent., but by something like 10 per cent My right hon. Friend has made a somewhat curious discovery. He has found that English teetotallers and Welsh parsons have one quality in common—the display of far greater reluctance than is shown by more sinful people to enter upon that state of eternal beatitude which presumably awaits them in the world to come. But whether you take 7 per cent, or 10 per cent., that portion of the bonus is incorporated in these proposals because the commutation will be on the lives of the clergy, and not on ordinary lives in an insurance scheme; therefore, whatever that percentage should be, that portion of the bonus which was extracted at the last moment from Mr. Gladstone in 1869 has already been generously given away by the Home Secretary. The other part of the 12 per cent, bonus in 1869 was 5 per cent, for administration expenses. The right hon. Gentleman (Sir T. Whittaker) has been called a financial expert. I will accept him as a financial expert on the cost of administration. He is a director of an insurance company, therefore he speaks of what he knows. What he said was that the 5 per cent, which is given as a bonus in the Irish Act was much too high, and that 2½ per cent, was ample. I suppose "ample" means more than sufficient. I should say that 2½ per cent., 1839 which means £50,000, is not only ample, but preposterous as the expense of distributing £2,000,000 among a thousand clergymen, whose numbers will become less and less as the years go by. It only means sending a thousand cheques and letters twice a year to the clergy and receiving the receipts.

§ Sir T. WHITTAKER
dissented.

Mr. LLEWELYN WILLIAMS
It may be that there will be some other expenses in connection with selling securities, and so on, but I will come to that question later. The £50.000 which is given in these proposals as the expense of administration is more than ample to cover the cost of that administration, whatever that may be. Mr. Gladstone never introduced any proposal in his Bill, as it left the House, to provide for these expenses at all. It was only when he was pressed by the action of the other House that he introduced it at all. Therefore, we have 7 per cent, or 10 per cent, of the Irish bonus given here because this proposal is based on the lives of the clergy, and we have 2½ per cent, for the cost of administration. Therefore you have this position, that you get this 12 per cent, bonus incorporated in substance, though not in name, in the House of Commons, not in the House of Lords, in the middle of the fight, and not as part of the terms of peace. That is the position in which we find ourselves at the end of the Committee stage and the beginning of the Report stage.
May I trespass on the indulgence of the House to say a word in regard to the 3½ per cent, to which the hon. and gallant Gentleman (Sir A. Griffith-Boscawcn) alluded? I do not think there is any man in this House, on whatever side he sits, who will dispute the proposition that if the Welsh Commissioners, who will have to find the £2,000,000 of commutation money, went into the market to-morrow to borrow that sum, they would get it under a percentage of 3¾. I do not profess to understand these matters; I have not been initiated in the mysteries of high finance like the right hon. Member for the Spen Valley (Sir T. Whittaker), but I have, made some inquiries, and I am told that you cannot borrow this under 3¾ per cent. [An HON. MEMBER: "Six per cent."] That is what I am told you will have to pay if you borrow £2,000,000 on Government security to-morrow. If you cannot borrow under 3¾ per cent., surely it is not too much to 1840 assume that you can get 3½ per cent, upon the investment of it. Three and a half per cent, was the figure mentioned in the Irish Act, but my right hon. Friend the Home Secretary refused to assent to the proposition that the rate of interest has gone down, or, at any rate, altered since then. He said—and what is much more important than what was done in 1869 is what is fair to both parties to-day—you could invest your money three weeks ago-in Irish Land Stock and get £3 12s. 6d. upon it. I glanced over the financial columns of the newspapers to-day and found that the figure given by the right hon. Gentleman stands good to-day, and therefore, if the Church had to invest its money at £3 12s. 6d. per cent., why is it unfair that she should be charged an eighth less than she could get in Government Stock to-day? I am told by financial experts—I find that financial experts, like lawyers, differ—that you can invest, money to-day in trustee securities and obtain interest at the rate of 3¾ per cent., and even 4 per cent. [An HON. MEMBER: "Over 4 per cent."] Well, why on earth is it unfair —I confess it passes my comprehension— when we borrow money at 3¾ per cent., and' the Church can invest it at 3¾f per cent, or 4 per cent., to charge her at the rate of 3½ per cent? I utterly fail to see the reason, logic, or fairness of the criticism.
I am told that the difference between 3½ per cent, and 3¾ per cent.—that is to say, ¼ per cent.—will work out on a conservative estimate at £40,000, and some gentlemen I have consulted tell me that it will work out at £60,000. The people of Wales on this one item alone stand to lose £10,000 in order that the Church may get what she has asked for, namely, commutation. My hon. Friends the Members for the Kilmarnock Burghs (Mr. W. G. Gladstone) and Dudley (Sir A. Griffith-Bos-cawen) are the gentlemen who proposed commutation, and therefore if we, who represent the Welsh people, accede to their request, I do ask whether it is fair that we should be damnified by so acting. I am quite willing that the Church should be safeguarded in a reasonable way against loss, but I say that the difference between 3½ per cent, and 3¾ per cent, is sufficient to guarantee her against any possible loss and any fluctuations that may occur in the market. My hon. Friend the Member for the Kilmarnock Burghs is not satisfied. He wants the money at 3 per cent., which would add, I suppose, another £80,000 or £100,000 to the Church. My hon. Friend 1841 has played a conspicuous and prominent part in these Debates. He has achieved many victories for the Church, but he has never intervened once in the Debates except when there was a money question involved. He will go back to Hawarden, once the home and cradle, now the grave, of Welsh hopes, laden with the spoils of the people of Wales. He cloaks his design under a veil of fine sentiments, eloquently delivered. He does not condescend to particulars. It is only in the result that we discovered what the real nature of his purpose was in moving his Amendments. We all remember the touching and moving speech which he made on 10th January, when he proposed his Commutation Amendment. He seemed to us pedestrians of debate to soar aloft like an eagle in the empyrean, there remaining motionless with extended wings bathed in the sunshine of heaven, the very picture and symbol of serene and remote detachment from earth, and the things of earth, and then he suddenly swoops down from air with lightning rapidity, and with fierce beak and talon he fastens upon a poor stray lambkin, and while the shepherd carelessly plays his pipe the great bird sweeps off with his prey, a dainty morsel for his hungry family on the rocks.
It would be unfair to ascribe all the credit of this achievement to my hon. Friend the Member for the Kilmarnock Burghs, because my right hon. Friend the. Member for the Spen Valley must have a share in the credit for this performance. The Homo Secretary had not thought any more than Mr. Gladstone or the financial authorities that anything should be given to the Disestablished Church for the cost of management, but after the hon. Member for Kilmarnock Burghs had spoken, my right hon. Friend the Member for the Spen Valley got up and uttered the blessed words, "Two and a half per cent." My right hon. Friend never seemed to take the slightest interest in this question or the Welsh Church until he hon. Member for Kilmarnock Burghs proposed that the Church in Wales should henceforth be turned into a sort of sanctified insurance company, and then his professional instinct were aroused, and he decided to take the Church under his protecting wing. When he said 2½ per cent., my right hon. Friend the Home Secretary replied, "Two and a half per cent., that is £50,000, a mere trifle," and so it is taken from the Welsh people and poured into the overflowing coffers of the Welsh Church. I con- 1842 gratulate the right hon. Gentleman on his victory and success. He has not always been successful. I remember times three years ago when the right hon. Gentleman used to come down to the House full of wrath against proposals in a certain Budget, but one scorching flash from the Chancellor's blazing eye used to send him tottering back into his seat with the manuscript of his undelivered master piece—

§ Sir T. WHITTAKER
When?

Mr. LLEWELYN WILLIAMS
In 1909 —with the manuscript of his undelivered masterpiece in the pocket of his tail, which in those days was generally between his legs. The whirligig of time has brought the right hon. Gentleman his revenge. It is now his hour to speak. He is Sir Oracle, and it is the Chancellor who remains dumb, turned to stony silence by the Medusa of Spen Valley. I deplore these concessions, but when I am distributing blame so freely I feel that I ought in common fairness to put a portion of it on the shoulders of the Welsh Members. It is the fault of no one in particular, and least of all of my right hon. Friend the Member for the Swansea District (Sir D. Brynmor Jones). It is the fault of the system which has gradually grown up. My right hon. Friend is the shepherd of a scattered flock. Five of them browse contentedly on the rich pastures of the Ministerial fold. Five of them are cooped up within the Labour party pen, and still others have strayed like lost sheep amid rocky places nibbling at scanty herbage, all the sweeter because of the peril by which it is encompassed. My right hon. Friend is not in the same position as the hon. and learned Member for Waterford (Mr. J. Redmond). I believe my hon. Friend by nature, and indeed J by inclination, would prefer to play the part of a roystering blade below the Gangway, ready for any cut-and-thrust encounter that might befall, equally happy giving or receiving buffets, but an untoward fate has wafted him above the Gangway, where he sits burdened with the cares of high office, and therefore it is that on everyone of those critical occasions— for they are critical—when money is involved he has to play an impossible part. He has to try to cover with stateliness of expression and with courtly dignity of manner the arid sterility of the official policy of what is sometimes termed in sardonic mockery, the Welsh Parliamentary party. Therefore, though I deplore 1843 those concessions, enormous and over-generous, I agree that my right hon. Friend the Home Secretary has been beset by Parliamentary difficulties, and, if he likes to say it is in order to overcome those difficulties he has made these concessions one after another, I have no more to say.
I have to acknowledge that he lacks the support of a Welsh party united, consolidated, organised, and disciplined, like the Irish party opposite, or like the Labour party. I know that he has had to contend against the untamable hostility of the hon. Member for Kilmarnock and one or two others who still prefer to fight under his banner, and not under the banner of the Government. I know that he has had to meet the criticism of financial experts like my right hon. Friend the Member for Spen Valley, and he has largely done so in this proposal, as I hope my right hon. Friend will admit. I know that he has had to endure the intolerable humiliation of being lectured and admonished by smooth young men on the second bench, who are private secretaries to his own colleagues in the Cabinet. I know that he has had to contend with flabby sentimentalists on this side of the House who are never tired of trying to imitate the generosity of the boy in the tale who was told by his mother that he ought to give alms to a beggarman in the street, and said to her, "Yes, mother, let us be kind to this poor man. I will give him sister's halfpenny." I know that he has had to contend against an Ecclesiastical Commissioner appointed by the Government, who has neglected to supply him with information which some Ecclesiastical Commissioners had supplied to the other side, on their own admission, five months before. I know he has been assailed by vituperation of bigots who have looked upon him as a mere heretic who confounds the persons and divides the substance. I know his difficulties, and if he tells me quite frankly that it is on account of those difficulties that he has been led to make these concessions, then I can only deplore the fact and bow to the inevitable.
But to be told that these enormous concessions are no concessions at all is merely to exasperate his friends without conciliating his foes. My right hon. Friend may be perfectly justified in what he has done up to now owing to the difficulties that he has met with, but the Parliamentary situation has changed con- 1844 siderably during the last two months. It is not the same now as it was when this Bill went into Committee. This Bill has had an educative influence in this House and outside this House. Hon. Members who two months ago were pressing for concessions tell me now, good loyal Churchmen as they are, that they are perfectly satisfied with this Bill, and think it is generous in its applicatian to the Church. Other Members, like the hon. Member for the Border Burghs and the hon. Member for the Morley Division of Yorkshire, have been surprised to find the intensity of the feeling and the enthusiasm that prevailed in their constituencies in favour of this Bill. They acknowledged it themselves at meetings which have been reported in public newspapers. The longer this Welsh question is open the more certainly shall we see the recrudescence of the old traditional Liberal demand for the separation of Church and State, not only in Wales, but in Scotland and England as well. Therefore I hope that my right hon. Friend is not going to give any more concessions. The Bill as it stands is more generous to the Church than the Bill of 1869 when it became an Act of Parliament. My right hon. Friend has none of the difficulties which confronted Mr. Gladstone, who feared another place in dealing with this question. He has a fair field before him. He has an almost solidly united party behind him, with the exception of two or three. As a Welshman, I have been greatly touched by the loyalty of the rank and file of the Liberal party in this House and outside it to this Bill. I know that we are a feeble folk. We are only few and scattered, and we could not hope to get the Bill through except for the loyalty of the rank and file of the supporters of the Government.

§ Mr. BRIDGEMAN
And of the Irish party.

Mr. LLEWELYN WILLIAMS
Certainly. I am not ashamed to accept for this Bill the support of my hon. Friends from Ireland. They have had all the blessings of Disestablishment, and it would indeed be an extraordinary thing if they did not support for Wales a measure which had been so fraught with benefit to their own country. The only thing I am surprised at is not that Irish Nationalists below the Gangway support this Bill, but that hon. Gentlemen from Ulster above the Gangway, who have experienced the benefit of Disestablishment, should troop 1845 into the Lobbies against this Bill. I hope that my right hon. Friend therefore will not give any more concessions. The Bill is over generous as it is. He has now a different situation to face from that which he had to face two months ago. Let him therefore resist the hon. Member for Kilmarnock and all his works, and when the good ship comes safely into port, though I am strongly of opinion that valuable cargo was unnecessarily and prematurely jettisoned in the days of stress and storm, the right hon. Gentleman will earn the admiration of the Members who have followed his conduct of this Bill through this House and he will earn something more valuable and something more enduring, and I hope something more dear to his heart, the imperishable gratitude of the people of Wales.

§ Mr. GLADSTONE
Unlike the hon. and learned Gentleman who has preceded me, I will confine myself to the new Clause before the House. I am one of those who regret very much that the Home Secretary has not found himself able to put down more satisfactory provisions for carrying out the principle of commutation, which he accepted upon the Committee stage, and which I think it was evident was welcomed, or, if not welcomed, certainly accepted in every quarter of the House. I think that our discussion in the Committee stage brought us to the state in which it was generally admitted that commutation is a great improvement to this Bill upon public grounds of policy, not merely in the interests of one section, but in the interests of the community as a whole. That being so, it comes as a surprise and disappointment to some of us that the Home Secretary has not found himself able to place upon the Paper a scheme of which the Church can take advantage without risk of loss. I believe that as the scheme stands at present it is out of reach of the Church. In my judgment it is not far out of its reach. However that may be, for practical purposes the result is the same. If the Government adhere to their decision this scheme of commutation is dead and the Government will have killed it. In those circumstances I desire to offer one or two suggestions for the consideration of the House which are designed to make the scheme more reasonable and sound from the actuarial point of view, and therefore more possible of acceptance by the representative body. The first suggestion is not the most important, because it is not actuarial. I 1846 notice that the representative body is only given one month in which to decide whether or not to take a system of commutation. I hardly think that that is adequate. I think it would be more prudent to take not less than three months. It is, after all, quite possible to think of circumstances which might delay the setting up of the representative body. A General Election might do so, or the necessity for taking a judicial decision on some point of I the Bill, or even possibly some dispute a to the proper and legitimate formation of the representative body itself. In such eases circumstances might arise which would have the effect that there would be | no body competent under the provisions of I the Act to take up commutation on behalf of the Church before the option expired.
It would therefore be wiser to have a I more ample margin of time than one month. The body that has to decide in a hurry decides at a great disadvantage. If that suggestion is not favoured by other Churchmen in this House, of course I can-j not expect the Home Secretary to take it into consideration, but if it is favoured by other Churchmen in this House I may point out to the Homo Secretary that there is an Amendment on the Paper to that effect. My chief complaint against the proposals of the Government is as to the rate of interest in calculating the commutation money. The question of 3½ per cent, as against 3 per cent, is not one, I suppose, which can be decided merely upon political convictions. It is a technical question as well, and the advice of experts must be sought and respected upon the point. I, too, wish to allude to the speech of my right hon. Friend the Member for the Spen Valley Division of Yorkshire. Those who heard that speech in Committee will entertain grave doubt as to whether the Home Secretary has treated us fairly by offering 3½ per cent. On that occasion my right hon. Friend— who is admitted to be a financial expert by the hon. and learned Member for Carmarthen Boroughs; and I hope that the hon. and learned Member will admit that he is an expert, with regard to the rate of interest—said that the Government would fail to find a single British insurance office that would undertake these annuities on the basis of payment worked out at 3½ per cent. There is no Member upon either side of the House whose opinion upon a subject like this is more worthy of attention. Moreover, let us remember that the representative body will not be unfettered like an insurance 1847 office in its choice of investment, nor will it be as competent as an insurance office to take advantage of the terms of the money market, or a bit more highly trained for financial purposes, and for financial purposes only. I am advised that an insurance office would not accept the business of these annuities, even at the rate of 3 per cent., if it was the only business that they were undertaking, and if it did not lead or tend to attract other business of a more remunerative character.
We are beginning to be afraid that the Home Secretary thinks that the 3½ per cent, is not an injustice to the Church, because the Church can rely upon voluntary offerings to make good any deficiency which might arise under the operation of this scheme, and that these voluntary offerings would suffice to make good any shortage in the funds available for paying the annuities. Very respectfully we would suggest to the Home Secretary that this is not a fair basis on which to found the scheme. We submit that the fair basis, and the only fair basis for such a scheme as this is, that the commutation scheme should be able to stand by itself, and that to stand by itself it should be financially and actuarialy sound. We submit that the only question we have to decide is what sum of money, taking into account, both interest and capital, will suffice to pay all these annuities. The question I submit is not what sum of money, taking into account the amount of the voluntary offerings, will do to relieve the Church in the future. Once you depart from the basis of a business footing, there is really no longer any impartial test by which you can measure the equity of any scheme such as this. After all, the Home Secretary might be pressed to put less into his scheme, and the loyalty and generosity of the Church might be relied upon to make good the difference; or pressed to put 2½ per cent. into it, on the ground that the I Welsh people were notoriously appreciative of education, and, if the county councils wanted to raise a fund to endow county scholarships, they could rely on voluntary offerings to enable them to carry out that scheme. Once yon depart from the high road of a financial business basis, you plunge into a jungle of guesswork, contradiction and dissatisfaction.
I do not wish to labour the point of 3½ per cent. I have no doubt there are many others who can deal with this technical and vital point with much more effect and 1848 authority than I can. Suffice it to say that we are advised by our skilled advisers that the Church would lose by this scheme if it is obliged to take it up at the rate of 3½ per cent. Why the Home Secretary, just at the moment when the Church will admittedly be undergoing a great transition, and a still greater trial and ordeal, should offer to us a scheme which experts pronounce to be unsafe financially and actuarialy, is something which I, for one, cannot understand, and which I, personally, resent very much. I should have thought it was not part of the functions of a Cabinet Minister in charge of an important Bill, upon the eve of the Third Reading of that Bill, to diminish or destroy the faith or the allegiance of any of his followers or of the Government which he represents. Such an achievement as that would not, I think, be directed by worldly wisdom, or by any wisdom. The scheme which the Home Secretary has put upon the Paper even since the time it first appeared upon the Paper, has been stiffened against the Church. Hon. Members may observe that in the Fourth Schedule the annual value of income derived from tithes has been arrived at for the purpose of commutation with, in the first place, a deduction in respect of the cost of collection; and, in the second place, in respect of the rates and Land Taxes. The system of taking a general average figures has been adopted in arriving at the figure of the cost of collection, but in respect of the figure for rates and Land Taxes there has evidently been a great deal of uncertainty. I say that advisedly, because on Monday the Home Secretary's own estimate of it appeared as 8 per cent., and by last Friday it had mounted to 12 per cent.
So far as we can judge the latter estimate of 12 per cent. is excessive, and we trust that the Home Secretary will be able to return to his original figure. It is rather strange that the Home Secretary should have conic to rest upon the figure 12 After all, I suppose it is desirable as far as possible to have some regard to previous calculations, and I understand that in the first White Paper is a Return from the Home Office in the name of the Under-Secretary to the Home Office, stating the amount of the Church's income and resources, and I gather from that Return that the deductions were calculated on the 10 per cent. basis. In view of the evident uncertainty as to the right amount, I desire to submit to the Home 1849 Secretary that it would be better to take the actual facts of each case, which I suppose can be obtained, without any real prospect of much dispute, from the local authorities. I venture to suggest that the Homo Secretary should either go back to the figure 8 or that the same words should be put into the Fourth Schedule of which the Government make use in the Fifth Schedule. There is already an Amendment on the Paper to that effect. When we allowed the Amendment on commutation to be negatived without a Division, we did so on what transpired to be a critical day in the Debates upon the Bill. Immediately afterwards, on the Amendment dealing with the curates' interests, the Government only secured a majority of forty.
Of course, if the Home Secretary had not accepted the principle of commutation, the majority would have been lower, possibly under thirty. Of course, we desire to impute no motive, but I think it is right to remind the Home Secretary of that fact. It may be that, after all, we were to blame, or perhaps we mistook the spirit, in which the Home Secretary took up this scheme of commutation and were too optimistic; but, be that as it may, we did entertain the hope and the expectation that the scheme which the Home Secretary promised to bring forward in lieu of our scheme would be one which, at any rate, would be sufficiently sound from an actuarial and financial point of view to permit of the representative body taking it up without risk at all. But now acute anxiety is aroused. We are advised by our skilled advisers that the Church cannot take this scheme up without grave risk of loss. We who believe in the Church think that we have before us a long and stern struggle to meet the obligations which already confront us under this Bill—a struggle which will grow harder when the feeling and attention that have been aroused by this Bill die down. I do not think, under those circumstances, and at such a critical moment of our existence, that the Church can be expected to take up this scheme, which is pronounced by experts to be actuarialy and financially unsound. I leave—having regard to these circumstances—the House to judge between us and the Home Secretary, and to say whether or not he is treating us fairly in offering us terms which experts pronounce to be financially and actuarily unsound.

1850

§ 5.0 P.M.

§ Sir THOMAS WHITTAKER
I do not propose to follow the hon. Member for Carmarthen Boroughs (Mr. Llewelyn Williams) in his carefully prepared gibes, in which he has relied upon his imagination for his facts. If he knows anything about the reference he made to what I said or did in connection with the Budget, he knows that what he said has no foundation in fact; and I can only assume, there fore, that he did not know anything about it, and was simply talking out of the back of his head, and inventing as he went along. I say that what he said is absolutely untrue, and if he knows anything about the matter he knows it was not true. Consequently, I can only conclude that he did not know anything about it, and imagined it as he went along. The hon. Member may be a good lawyer, but he knows nothing of finance and nothing of actuarial calculations. As is usually the case under such circumstances, the ignorant man is suspicious. In connection with this matter, I only intervene on what is purely a business point. I have assumed, and other hon. Members have agreed, that commutation is of itself desirable. It is admitted that commutation would be desirable in the interests of the Church; and it is admitted that commutation would be desirable in the interests of the Welsh county council. It would give to them an accurate knowledge of the amounts they had to deal with, and enable them to formulate plans. I have accepted that position, and I have not attempted to discuss it. The only practical point before the House today, and to which the hon. Member for Carmarthen Boroughs addressed himself very little indeed, is, are these terms of commutation fair and equitable, and when I speak of fair and equitable I mean fair and equitable not only to the Church, but also to the Welsh people. The suggestion was made that these annuities should be commuted on a 3 per cent, basis. I felt at liberty to indicate my view, having sonic knowledge that that was a fair basis on which to calculate those annuities, and I gave some reasons for so thinking. I agree with the hon. Member that, taking the Bill as a whole, it is a generous Bill. I desire that it should be a generous Bill, and I feel that it is a generous Bill, but that matter was not under discussion, and this is merely a discussion as to what would be a fair method of transforming these particular 1851 stipends into commutation. It is not, therefore, a matter of concession, but a matter of business. If anyone will go to the Government Post Office, or if anyone will go to the National Debt Commissioners, they will not get an annuity at 3½ per cent. The amount for management has been criticised. If the hon. Member had to manage this he would find that running over the long term of years it has to run, and taking into consideration all the expenses that will be connected with it, that 2½ per cent, is a fair, ample, and reasonable provision. The provision in the Irish Church Rill was 5 per cent. I think that was unnecessary, and that 2½ per cent. is perfectly fair. The Home Secretary has, I think, acted reasonably and fairly in making that concession. In connection with the rate of interest which can be obtained, it is true that at the moment Irish Land Stock can be obtained to pay £2 12s. 6d., and some other Trustee securities can be bought to-day to pay rather more; but if you are going into the market with £2,000,000 of money you may not find it quite so easy to pick them up, and when you come to sell them—and they will have to be sold—provision has to be made for risk of depreciation and loss in that connection. I ventured to remark in Committee that if this scheme had been adopted by the Church, or any other body, twenty-five years ago, the Church, or that other body, would have been bankrupt to-day owing to the depreciation that has taken place in that class of security. I do not anticipate any similar depreciation in future, since surely we have gone so far that none of them can go a similar distance. Still, these are facts to bear in mind.
On the other hand, I suggest to my hon. Friend the Member for Kilmarnock Burghs (Mr. Gladstone) and those who are interested in this matter, that if they will look into the Amendment as the Home Secretary has now placed it upon the Paper, although he has not conceded the point of interest and reduced that to 3 per cent., yet he has made other provisions in the Amendment, and liberal and considerable allowance must be made for those provisions. After looking into those and forming the best opinion I could about them, and it is not easy to form an exact opinion since you have to guess as to what may occur in many directions, I am disposed to think that the other concessions which the Home Secretary has made will 1852 to a very large extent balance the difference between 3 per cent, and 3½ per cent. If, at the time that the Church comes to consider whether they can accept this arrangement or not, they are able to make the investment of their money to yield anything like the rate which they can get today, under the Amendment as it is now suggested to be amended by the Home Secretary I venture to think that the Church will find that they can work this arrangement. It will be pretty close, but I think that the concessions which the Home Secretary has made are such as might be accepted as a compromise. You have to remember, on the other hand, that this does mean some loss on the one hand to the county councils, and on the other hand some to the Church. I do not think it will be much either way, and it may be none at all but it will be a great advantage to the county councils of Wales to know exactly what money they have got to deal with and to be able to lay their plans and arangements right away. That is a substantial gain, and it will also be a substantial gain to the Church to have these funds to deal with themselves. Therefore, looking at the matter as a business arrangement, I think both of them might take the little risk of loss there is on either side, and the arrangement, as now made, seems to me one which might be accepted.

§ Sir ALFRED CRIPPS
I quite agree with the right hon. Gentleman who has just spoken that we are dealing with a business question, and that it has to be approached from a business point of view. Let me say a word about what fell from the hon. Member for Carmarthen Boroughs (Mr. Llewelyn Williams). It is quite clear that in his speech he travelled far outside business considerations, and repeated almost the identical words which he used during the progress of the Bill in Committee about certain Members on his own side and private secretaries. The hon. Member said the Welsh people had not been consulted on the question of commutation. If he desires that the Welsh people should be consulted as regards the provisions of this Bill, every Unionist Member will support him. It is what we want, and I agree with him that a Bill of this kind, before it is passed into law and becomes operative, ought in its final form to be put before the Welsh people in order that they may say "Yea" or "Nay," and, of course, before the electorate at large. We assent to that proposition, and in that 1853 respect the hon. Member was perfectly sound. His second proposition was rather a curious one. He talked about the educative influence of the discussions during the course of this Rill on Welsh opinion.

Mr. LLEWELYN WILLIAMS
And English opinion.

§ Sir A. CRIPPS
I should like to know what about the educative influence on the electorate in the Flint Burghs where the result was to diminish the majority by I half. He referred to the private secretaries but he himself is like them. He I gets up and makes a speech, but will not give a vote which will make the views so expressed really effective. He is very courageous in talking, but when it comes to action I am afraid I must say he is not. Another remark he made was about taking money out of Welsh coffers, and he used I some tremendous allegorical phrases. I think it would be out of place to discuss that question now, but what you are dealing with under this Bill by its immediate purpose is the taking of money out of Church coffers which we on this side think is a system of plunder and sacrilege which ought not to be allowed. There was one other statement of the hon. and learned Member in which he was wholly and hopelessly inaccurate, and that was as regards the treatment in the Welsh Bill, and that in the Irish Bill. In every single particular as regards the compensation with which we are now dealing the Irish Bill is more generous in all its terms than the Welsh Bill. I will give an illustration. The poorest of the clergy and the curates are to have no compensation under the Welsh Bill. They were fairly, properly and generously treated in the Irish Bill. In the same way the poorest Church officials who do not have a freehold position are to have no compensation under the Welsh Bill, whereas under the Irish Bill they were all given fair compensation whether they had technically a freehold office or not. Nothing is more striking and nothing shows more clearly the inaccuracy of mind with which the hon. and learned Member for Carmarthen Boroughs approaches this question in his desire to attack apparently some of his friends on his own side than that he should venture to make a statement of that kind, which is utterly out of accord with every Clause of the Irish Bill as compared with the corresponding Clauses of the Welsh Bill. In his higher flights of 1854 fancy I do not propose to follow him because one realises, I hope I do, though I do not think he does, that when you are discussing an important business subject of this kind under conditions of guillotine, one does not like, at any rate, to occupy time unnecessarily except as regards the particular point involved. Whatever bitter feelings I may have about other hon. Members, I do not think this is the time to indulge in recriminations of that kind.
Let me say a word as regards the business proposition. I agree entirely with what was said by the right hon. Gentleman as regards the 3½ per cent., but I differ from him in what he said as regards the other proposals which are now contained in this commutation Clause. It is quite clear, and I take it from the right hon. Gentleman himself, without you find compensation in some of the other provisions, 3½ per cent, is a wholly impossible basis. The right hon. Gentleman referred to-day to what he said the other day when he remarked, "I think you would fail to find a single British insurance company that would undertake those annuities on a basis of tables worked out at 3½ per cent." And what any British insurance company could not undertake it is quite certain that the representative body could not undertake. There are advantages in carrying on an annuity business in connection with an insurance business which the representative Church body would not have. I may also remind the right hon. Gentleman of his statement, that of all the business carried on by insurance companies the annuity business is the least satisfactory. He told us also that, although in his own office they carried on this business on a 3 per cent, basis, yet they found it so unprofitable that they had given it up. What does that mean? What is the representative Church body? It is not a body with any funds at its disposal for business purposes, and even if it desired to do so, it could not undertake commutation except on terms showing that it was really guaranteed against loss. It would be extremely unfair if it attempted to do so. What would be the position of the life interests to be compensated if the representative Church body undertook commutation and had not sufficient funds to carry it out? I think that that is a position which is bound to be faced. I certainly agree that, although commutation in principle is of great importance both to the State and to the 1855 Church, yet it is quite impossible for it to be carried out at all on a 3½ per cent, basis. It makes a difference of 14 per cent, as compared with the 3 per cent, basis. It is an enormous difference. Taking the right hon. Gentleman's statement that even on a 3 per cent, basis his own insurance office has given up this business as unsatisfactory, it is utterly impossible as a business consideration, however wise it might be to do it, for the representative Church body to undertake it on a 3½ per cent, basis.

§ Sir T. WHITTAKER
I think the hon. and learned Gentleman will realise that when we as an insurance office had an annuity business we were bound to do it on the ordinary mortality tables. At 3 per cent. that does not pay. If we could have done it on tables representing the mortality of our temperance lives we might have carried it on; that would have meant that our rates would have been higher than those of anybody else. The point of my remark was that in the Amendment as put on the Paper the Home Secretary makes a special provision, and secures that the tables shall be calculated on the special mortality of clergymen. That will make a difference.

§ Sir A. CRIPPS
I was coming to that. I presumed that that was one of the points to which the right hon. Gentleman referred when he dealt with the scheme as a whole. Taking the explanation that he has given, it is much sounder to get your 3 per cent, right than to have the risk of your annuity tables being wrong; because it is the risk of the annuity tables being wrong, coupled with what the right hon. Gentleman said about the buying and selling of securities, that makes the annuity business a risky business in itself, and one in which considerable losses have, in fact, been suffered, although every possible calculation has been made within what was considered the margin of safety. It is of the essence of the annuity business that it is risky and unprofitable. I do not know whether the right hon. Gentleman has worked it out, but I do not believe myself that any alteration as regards the annuity tables is the least likely in a case of this kind to make the difference between 3 per cent, and 3½ per cent. The proposals now put forward are less favourable than those in the Commutation Clause sanctioned by the Home Secretary before the alteration was made. As was pointed out by the hon. Member for 1856 Kilmarnock Burghs (Mr. Gladstone), instead of 8 per cent., 12 per cent, is being taken off for rates and Land Tax. That is a very large difference indeed. I do not know whether the right hon. Gentleman has considered the effect of that. I do not know whether in his view it is fair and right that you should take off an all-round 12 per cent, as against 8 per cent., or whether in his opinion it would be more fair and proper to take the particular average in each case. I think myself that the particular average in each case would lead to a great deal of friction and trouble. As an alternative to that, I think the right hon. Gentleman ought to give the 8 per cent, as against the 12 per cent, reduction.
It is utterly impossible to get a nice calculation upon this point. I have taken the trouble to make certain calculations. It is impossible to have sufficient data for all the calculations, but so far as I can ascertain, 8 per cent, is much more accurate than 12 per cent. Whether that is so or not, I appeal to the Home Secretary not to make the conditions worse by making a 12 per cent, reduction. Commutation being admitted in principle, what is the good of adjusting it upon a table which the right hon. Gentleman is told in the opinion of the actuaries who are advising Church people in this matter is one which they cannot adopt, because, if adopted, it would lead them to bankruptcy and insolvency? If the right hon. Gentleman will not take a 3 per cent, table, will he accept the suggestion that an actuary appointed by the Privy Council should decide as to what the table should be on which the commutation is founded? That seems to be a possible way of meeting the difficulty between those who are proposing 3½ per cent, and those who think that 3 per cent, is right. Looking at it on a business basis, it is no good whatever thinking that the representative Church body can be in the financial position to undertake a large financial operation when they are advised by actuaries cognisant of this class of work that they cannot do it because their funds are insufficient. I do not think that the Home Secretary means that his Commutation Clause should be merely a paper Clause which cannot come into operation. Therefore I appeal to him to approach the subject from a business point of view, and to put it on business terms which can possibly be accepted by the representative Church body, in order to carry out a matter which is to the advantage of everyone.

1857

§ The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna)
I am accustomed to finding myself m a position which is not regarded as satisfactory by hon. Gentlemen on the other side and is not altogether easy for my hon. Friends on this side. In a matter of this kind, in which one's duty is to endeavour to do perfectly equal justice between two parties to a bargain, it is not to be unexpected that neither of those parties will be altogether satisfied with the proposal offered them. The hon. and gallant Member for Dudley (Sir A. Griffith-Boscawen) stated that the Clause in its present form was so bad that he and his Friends would find themselves obliged to vote against it. If I understood him aright, my hon. Friend the Member for Kilmarnock Burghs made a similar statement. I hope the House will recognise that if this Clause, which has been introduced in order to meet the substance of an Amendment proposed by my hon. Friend the Member for Kilmarnock Burghs and seconded by the hon. and gallant Member for Dudley, so far fails to satisfy them and their Friends that they would not even allow the representative Church body to have the option of refusing it, I do not think that I should be justified in pressing the Clause upon my" hon. Friends on this side of the House, who feel extremely doubtful, in fact more than doubtful, as to the merits of the Clause from the point of view of the Welsh county councils. I think I am obliged to say that, inasmuch as the Clause contains this option to the representative body, if it is so bad that hon. Members would not allow them to exercise that option, in view of the opinions expressed by my hon. Friends on this side, I do not think I should be justified in forcing s settlement upon the two parties, each of whom is strongly opposed to it. It remains only for mc to show hon. Members on both sides that the Clause is not really of the kind that they imagine. I can show my hon. Friends on this side that it does not work the injustice which they believe to the Welsh county councils; and I can certainly show hon. Members on the other side that they would be extraordinarily foolish if they did not allow the representative body to consider the Clause on its merits for themselves. The hon. Member for Dudley directed his argument almost exclusively to the calculation of the table upon the basis of 3½ per cent., and that has been the substance of subsequent speeches also. I cannot help thinking that there is an extraordinary misunderstand- 1858 ing as to what is meant by taking 3½ per cent, or 3 per cent, as the basis of calculation. The hon. and learned Member for South Bucks (Sir A. Cripps) said that the difference between the two amounted to 14 per cent. Where on earth does he get that figure? Does he really mean to say that, assuming the life interest is worth twelve years' purchase, the difference amounts to nearly two years' purchase? All I can say is that the actuarial calculations that I have received altogether contradict that statement.

§ Sir A. CRIPPS
The difference between 3½ per cent, and 3 per cent, is about 14½ per cent.; but when you are reducing that 14½ per cent, from a long period to a twelve years' period it is proportionately reduced.

§ Mr. McKENNA
It altogether depends on the proportionate reduction. The hon. and learned Member stated that it made a difference of 14 per cent.; in other words, that on £2,000,000 it made a difference of £280,000. It is nothing of the sort. The actual difference, as I am advised, on a calculation of £160,000 a year would hardly amount to £100,000.

§ Sir A. CRIPPS
The right hon. Gentleman must not take the life interest in the one case, and the total calculation in the other. He must compare like with like, and then he will find that I am accurate.

§ Mr. McKENNA
What I am taking is this. For the purposes of discussion, and solely for the purposes of discussion, we have throughout these Debates treated these life interests as being worth approximately £2,000,000. I said that whether you take 3 per cent, or 3½ per cent, as your fixed calculation it would make a difference of about £100,000; you would have to pay £100,000 more on the 3 per cent, basis than on the 3½ per cent. That is an approximate figure. The hon. Member says you would have to take £280,000 more.

§ Sir A. CRIPPS
dissented.

§ Mr. McKENNA
If I have misunderstood the hon. and learned Gentleman I will withdraw everything I have said. Let it first be understood that the difference between the calculation of 3 or 3½ per cent. basis is worth about 5 per cent. It is not of that vital importance that is supposed when people take the large figure of 14 per cent. Let us try and look at the reason of this thing. What is the reason why you have 3 per cent, instead of 3½ per cent. My hon. and learned 1859 Friend behind me speaks of no insurance company taking this business except on a basis of 3 per cent.; what is the reason for it? In calculating life interests you have got to work by the necessary life tables. All life tables are obviously made by the experience of the past. The very latest life tables you may have—and I have consulted the very latest for this purpose— is a life table only made this year. It is the latest produced. It dealt with a period of perhaps the last twenty-five years. However much you may bring these life tables up to date you are only reckoning the average of life in past years. All experience shows that the longevity of the human race in all classes in this country is increasing. Consequently all calculations made upon tables based upon past experience have always proved under the mark.
It is in order to meet that certain loss which they feel sure they will have to encounter from their experience in the past that they deliberately calculate upon a 3 per cent, or a 2½ per cent, basis, although they know that they can invest their money at 3½, 3¾ or 4 per cent. It is in order to make good the loss which they feel sure is bound to arise that the insurance companies deliberately take a lower rate of interest knowing, it is wrong; they do it in order to compensate for an unknown loss consequent upon the continued increase in the longevity of the human race. What is our business in this case when we proceed to consider the life interest of the Welsh clergy? In the first place, we take the greatest experience we can obtain as to their longevity. The ordinary mortality tables of the insurance officers are no good here. The Government life tables are no good. They are based upon averages extending over the whole people. We have, on the contrary, taken in our Bill a life table based upon the tables of mortality of the Government life annuities, subject, however, to such allowance as may be determined in the course of agreement between the Welsh Commissioners and the representative body by the actuary to be the proper allowance to be made on account of the greater longevity of the clergy as compared with other classes of the community. The allowance which will have to be made upon that account is fully worth the other allowances which we make, and which I shall mention later. The allowance we make on the other account is fully worth the difference between calculating upon a 1860 3 per cent, and a 3½ per cent, basis. It is so much more worth the difference that I feel justified, from information I have been able to gather, in saying that the further allowance which is to be made in this Clause will in itself equalise the difference between the calculation on the 3 per cent, and the 3½ per cent, basis. Will the hon. and learned Gentleman and the Member for Kilmarnock Burghs be so good as to look at the last words of lines 19 and 20 on the Report Schedule? They will see they are, "allowance is to be made on account of any prospective decrease in the death rate." Can either my hon. Friend or the hon. and learned Gentleman point to any insurance offices, or to any Government life tables, in which the calculation is made upon a basis not only of the tables appropriate to the particular life, but in which an allowance is to be made for any prospective decrease in the death rate? Of course they cannot. Nothing of the sort exists. Here for the first time we have made allowance for the prospective life of the particular individual whose life interest is to be commuted.

§ Mr. EVELYN CECIL
The words the right hon. Gentleman quotes were not in the original White Paper circulated.

§ Mr. McKENNA
How does that affect the argument?

§ Mr. GLADSTONE
Would the right hon. Gentleman give us some estimate what this change of words would mean to the Church in money?

§ Mr. McKENNA
It is impossible to say. They would certainly make a material difference. I would ask my hon. Friend to look at this matter purely as a matter of business and with a single desire to do justice between the parties. What is it that you commute—that you have got to pay for? You have to pay for the life interest of a particular individual in each case. You total the amount representing the total value of all those life interests. My hon. and learned Friend the Member for Carmarthern Boroughs would surely agree with me, if we commute at all, we ought to commute on a basis of the life, interest of the Welsh clergy. We ought not to commute on the life interests of another class of persons who do not usually live so long. We do not wish the county councils to pay less than the full value of the clergyman's life. Looking at the tables, current to-day for a period of twenty-four years, we find that the Welsh 1861 clergy live now on an average longer than the tables made twenty-four years ago made for the same class of persons. Surely it is reasonable to expect that the next tables made twenty-four years hence will also show a greater length of life than the tables produced to-day. Consequently you must take into account the prospective greater longevity of the clergy, as of all other classes. That is what you have to pay for—the life interest of the individuals. That is what we propose to calculate the value of, fully and completely, the true life interests of the Welsh clergy. If you give the clergy the full life interest it would be monstrously unfair on the face of it to calculate a rate of interest less than you know that the representative body can invest its money in to-morrow on British security. [An HON. MEMBER: "No."] Yes, to-morrow the representative body can invest £2,000,000 in Irish Land Stock paying £3 12s. 6d. per cent. If this Bill is not to become law— I hope it will become law before the month is over—but I must suppose to the contrary—supposing this Bill does not become law until some time next year, I do not suppose any person in this House would object, if at that time, owing to the state of the money market, the rate of interest had either risen or had fallen, to an alteration in the figure to 3½ per cent. But I have put into the Bill now a figure based upon the actual rate of interest which anybody can obtain for British securities in the open market. I regret that my right hon. Friend the Member for the Spen Valley (Sir Thomas Whittaker) is not here. If he had been, I would have asked him whether with such life tables as these, and with such a calculation for the prospective increased longevity, whether the insurance offices would take this business of 3½ per cent.? I am pretty sure that he would reply that the additional words I have quoted, which we are allowing, and the other—that the two together are worth far more than the difference in calculating upon the 3 or the 3½ per cent.
I come to the second point, the question of the 2½ per cent, which is to be allowed for expenses. Here, again, there is a most extraordinary misunderstanding on both sides of the House. At the present time, under the Bill as it stands, without commutation, there would be certain work that the county councils would have to perform in respect of the property they will take over. They would be com- 1862 pelled half-yearly to pay to the existing incumbents their life interest. They would be responsible for the collection of the tenths. They would further have to supervise the several hundreds of bits of glebe in the possession of life tenants, who might be supposed to be not too friendly to the county councils. Dilapidation would have to be secured against. All that is work which the county councils will have to do under the Bill without commutation. If there is commutation the county councils get rid of that work. The representative body take over the whole of the work which would have been done by the county councils. The representative body, in addition, have not, as many think, merely to write out cheques twice a year. The representative body have to settle the amount of the commutation with each individual incumbent. In order to carry out that work the representative body will be obliged, for some time at any rate, to pay actuaries, to maintain an office, and moreover a considerable number of clerks. The first piece of work, the settling of the amount of commutation will undoubtedly cost the representative body a considerable amount of money. Once that is over then I agree that all the representative body will have to do will be to pay the amount of settled interest twice a year. How do we arrange as between the parties? We say that the county council that is relieved of the work should pay over to the representatibe body which has the new work imposed upon it the sum of £50,000; 2½ per cent., or £50,000 reckoning the commutation money to be £2,000,000. Is that an unreasonable sum? When we reckon how much the county councils are charging the Church representative body for the collection of the tithes, we charge 2½ per cent, for that; that is to say, on the same basis we charge about three-quarters as much for collecting the tithe as they charge us for doing all the work I have named. If the representative body can save money on £50,000, it is equally true that the county councils can save money upon their £37,000. The only question we have to decide is, whether, if the representative body has got to pay the county council 2½ per cent, for collecting the tithes, is it unreasonable to make the county council pay to the representative body 2½ per cent, for all the work? Is 2½ per cent, enough to pay the representative body? I believe it will prove adequate. My right hon. Friend, the Member for Spen Valley (Sir 1863 Thomas Whittaker), has been much quoted and he has very wide experience, and his view is that it will prove ample. I admit that actuarial advice can be obtained and very readily given to the effect that 2½ per cent, is not enough, but I have found whenever such advice as that is brought to my notice, that the whole of the facts of the case have never been kept in mind. We have got to remember that this new work of this fund of £102,000 a year which is to be distributed amongst the various incumbents, is only in addition to the work that the representative body have already in hand and in respect to which they will have to keep offices and employ clerks. Bearing that in mind I said 2½ per cent, will prove amply sufficient to remunerate the representative body, and, on the other hand, 2½ per cent, will amply remunerate the county councils for collecting the tithes.
Then my hon. and learned Friend, the Member for Carmarthen District (Mr. Llewelyn Williams) commented on the fact that under this Bill we were giving to the representative body an option to refuse the Commutation Clause, whereas no option is given to the county councils, but my hon. Friend overlooked this important point. Under the Commutation Clause we are transferring from the county council to the representative body the liability. The county council are relieved of the liability to pay life interest. The representative body under the Clause have the liability imposed upon them to pay this life interest, and it would be manifestly unfair to impose the liability upon the representative body without their consent. Is it necessary, on the other hand, to gain consent to the principle of commutation from the Welsh county councils? I submit not. If this scheme is accepted in principle by my hon. Friends and myself who have the honour to represent Wales, I think the Welsh county councils would have their views quite adequately expressed, and therefore it cannot be said that this is in any sense a one-sided scheme, merely because we leave the option of refusal to that body which has the new liability imposed upon it.

Mr. LLEWELYN WILLIAMS
Yes, but we ought to be very careful in going into these figures, because we are acting on behalf of people not consulted.

§ Mr. McKENNA
I agree entirely with my hon. and learned Friend that in any examination of these figures we are bound 1864 to keep the interests of the county councils as much in mind as the interests of the representative body, but we are equally bound to keep the interests of the representative body as much in evidence as the county councils. I believe this scheme does perfectly equal justice between the bodies, and I believe an examination of the figures shows that to be the fact. My hon. Friend the Member for Kilmarnock (Mr. Gladstone) observed that once we depart from a business basis we should get into a jungle of guess-work in our calculations. But what is his business basis beyond merely preferring 3 per cent, to 3½ per cent.? What possible business basis does he put forward? He says that in the Committee stage I held out expectation of a better scheme than this. So far from that being the fact, this scheme is a better scheme for the Church than the one I held out in Committee. It it quite true that in Committee I made no suggestion to pay 2½ per cent, for expenses. In this scheme I do offer 2½ per cent, for the expenses of the representative body, but beyond that the terms which are now offered in calculating the expectation of life interest are far better than anything I outlined in the Committee stage of the Bill, and my hon. Friend has not the smallest justification for suggesting that in this scheme I have in any degree withdrawn from any promise I made in Committee.

§ Mr. GLADSTONE
I never said the right hon. Gentleman did that.

§ Mr. McKENNA
I understood my hon. Friend to say that I held out expectations in Committee of a better scheme.

§ Mr. GLADSTONE
These words were never used by me.

§ Mr. MCKENNA
I am very sorry, but I took the words down that I held out expectation of a better scheme, and I wish to assure him, if he has any such idea, that so far from that being the case, this scheme, as my hon. Friends who represent Welsh constituencies complained, is better than offering to the representative body that which I suggested on the Committee stage. Reference is made to the deduction which I now propose of 12 per cent, from the annual value of the tithe rent-charge in respect of rates. It is true that originally we proposed, I think, 10 per cent.; we then reduced the 10 per cent, to 8 per cent., and we have finally raised that figure to 12 per cent., which would appear to show a certain amount of indecision in 1865 our mind. The history of that change is simply this. The original proposals made were from such figures as we were able to obtain of the average amount of rates in rural areas in Wales. I was then informed by the Ecclesiastical Commissioners that in their experience of the deduction of rateable value of tithe rent-charge, the net deduction in respect of rates ought not to exceed 8 per cent., and I accepted their figure, and altered my original 10 down to 8. Later I had the advantage of obtaining from the Local Government Board the precise figures as to the amount of rates in rural areas in Wales, and after making all legal deductions I was unable to reduce the figure below 12 per cent. If anybody objects to 12 per cent. I am perfectly willing that we should have in the Clause the precise figure of the rates paid at the present time in respect of tithe rent-charge, but allowance must then also be made in respect of the Land Taxes. Twelve per cent, here is the calculation both for rates and Land Taxes. I am perfectly willing, and I do not think the county councils will lose under it, to substitute for 12 per cent, whatever amount is actually found to be paid at the present time.
I think I have now dealt with all the points raised with this exception: my hon. Friend the Member for Kilmarnock and the hon. Member for Dudley (Sir A. Griffith-Boscawen) both argued that I had assumed that this scheme was a fair scheme, because the Disestablished Church would be able to pay any deficiency out of increased voluntary subscriptions. I never made any assumption such as that as a basis for the proper calculation of the life interest. It is quite true that in considering the advantage of commutation of the life interest, I argued, as I should argue now, that one of the great advantages of commutation to the Disestablished Church is, that having a fund in hand of such a large amount, they will have a good argument with which to go to wealthy neighbours and say, "If you only subscribe so much, we shall be able to maintain our Church as if it was never Disendowed at all." It is a useful argument, but the calculation as to the amount of the full value of the life interest, of course, could not be based upon any expectation of voluntary subscriptions that the Church will hereafterwards be able to have. I have treated the Disestablished Church of England in Wales, as a live Church, and that the lay members will 1866 be as willing to subscribe as the lay members of the Nonconformist Church. I believe the Disendowment will be a spur to the generosity of the laymen in the Church of England in Wales, and that they will be as well able to raise funds as the Nonconformist bodies, and I think commutation will assist the Church in that task. But in calculating the true basis of commutation and the right amount to be paid, I have taken only two things into account, namely, what is the value of the life interest or how many years is the present life tenant really likely to live, and at what rate of interest can the Church invest its money? I think I have given sufficient reasons to justify me in recommending to hon. Members not to be quite so imprudent as to reject this Clause without giving the representative body any opportunity of considering its value.

§ 6.0 P.M.

§ Mr. ALFRED LYTTELTON
The experience of the past has not enabled us to place very much reliance upon the hopes of the Home Secretary with regard to the financial position of Churchmen under this Bill, Let me just put to the House the odious position into which he has endeavoured to manœuvre the Church by the speech he has just made. Let us assume—no doubt even he can assume—that we are right, and he is wrong; that is to say, that to take over this scheme of commutation would involve such serious risk of loss to the Church that she would not be able to do it. He wants us to take this Clause blindfolded, and to give the option to the Church to accept it. Just imagine what position that would place a Church in. Everybody knows, and nobody better than the hon. Member for Kilmarnock, that it is tremendously in the interests of county councils and the party opposite to get a commutation scheme through. [An HON. MEMBER: "We do not want it."] Yes, because it will enable the Welsh electors to see that there is money in it, and that he is getting something. I think that is quite obvious. The relations of the Church to the county councils in certain places may be very different under this Bill, and if the Church has the option of accepting this and does not do so, and the county councils wish it to accept it, then those county councils can put pressure upon the Church in every sort of way, and place it in the most odious and embarrassing position. That is not fair. In a way, which I do not think worthy of the situation, the right hon. Gentleman has 1867 threatened the representatives of the Church in this House that if we do not assent to this scheme he will withdraw it. I intend to make him a counter offer in order to see if he will accept it. One point which is perfectly clear is that it is not a question of principle between us, but one of terms. We all agree that it is in the interests of the Church as well as the party opposite that some commutation scheme should be arrived at. I do not mean to dogmatise like the right hon. Gentleman has done about the precise terms. I dare say I am as familiar with the fact as he is, but I am not going to dogmatise on them so confidently, because, after all, there is room for a fair division of opinion between the bases of interest provided for in this Bill. I want to show how sound the right hon. Gentleman the Member for Spen Valley (Sir T. Whittaker) was in regard to what he said about the 3 per cent, basis upon the last occasion. I find that no less than twenty-eight of the first-class life offices in this country do business in annuities upon a 3 per cent, and not a 3½ per cent, basis, and there are two companies which do it on the 2½ per cent, basis. That corroborates as fully as figures can do the opinion which the right hon. Gentleman gave to the House.

§ Mr. McKENNA
What life tables?

§ Mr. A. LYTTELTON
I am unable to say.

§ Mr. McKENNA
But that is the vital point.

§ Mr. A. LYTTELTON
I was referring to what the right hon. Gentleman the Member for Spen Valley stated, and he was absolutely accurate, in fact, his figures give a margin in our favour. As I have stated, only two offices do business on a basis of 2½ per cent. If that is so, I say without hesitation that it is asking the Church to do more than she is competent to do to accept straightaway a 3£ per cent, basis. I am not forgetting the allowance made for a greater prospective longevity. Let me take the principle upon which the Government have proceeded, and of which they have boasted throughout these discussions. It is that they are going to indemnify the existing interests of the clergymen in Wales. If they are going to give them their incomes in annuities for the rest of their lives, surely it is perfectly right to say that the clergy are entitled to a Government annuity. If not, why not? I do not think anybody can say they are not entitled to it, and if they are 1868 let the right hon. Gentleman go to any post office and see whether he can get an annuity upon a basis of 3 per cent. I think he would find they would ask him 2½ per cent.

§ Mr. McKENNA
Will the right hon. Gentleman accept the Government annuity terms? If so, I will offer them at once most willingly, but this Clause gives far better terms.

§ Mr. A. LYTTELTON
What do you mean by a Government annuity?

§ Mr. McKENNA
Ordinary Government tables.

§ Mr. A. LYTTELTON
If that will give us a 2½ per cent, or a 3 per cent, basis we will accept it, but we will certainly accept nothing less than that. The right hon. Gentleman says that life insurance offices do it on a 2½ per cent, or 3 per cent, basis, but they do it on tables, and the right hon. Gentleman says that we offer substantial terms based upon the greater longevity of the clergymen. The right hon. Gentleman stated that the difference between 3½ per cent, and 3 per cent, is £100.000, but he does not know, and I do not know at the present stage what the advantage is in regard to this prospective longevity in the concession he makes. The right hon. Gentleman was directly challenged by the hon. Member for Kilmarnock, and he said he did not know himself. Can you trust the Home Secretary's accuracy in this matter, when with one breath he tells my hon. Friend opposite that he cannot tell what this concession is worth and in the next breath he says it is worth more than £100,000. The right hon. Gentleman professes ignorance at one moment and knowledge at another; he professes ignorance when it is in his favour and knowledge when it is not. That is not fair. I do not wish to be drawn into doing any such thing myself. I say at once I do not know what the value of that concession is. It must be worth something, but nobody in the world except a highly skilled actuary, after a considerable time, can give even an approximate estimate as to the value of this concession. If the Home Secretary wishes to deal with us fairly, let him consider the proposition I am about to make. I ask him to let the question as to whether 3 per cent. is a fair basis or not go before an actuary selected by the Judicial Committee of the Privy Council, and let him take into account by the terms of reference what the value of the concession which the right hon. Gentleman proposes to make is in regard 1869 to the mortality tables. Surely the right hon. Gentleman will not contend that an actuary will not have a better chance of settling this question, and if the right hon. Gentleman will do this the Church will be content to abide by that decision. I think that is as fair an offer as can possibly be made. Obviously the right hon. Gentleman proceeded to make a concession without measuring what was the worth of it, and he has shown that he does not know what that concession is. Therefore let an actuary appointed by an impartial tribunal decide the matter between us. I could not make a fairer offer, and I would like to have an answer in regard to it, because the right hon. Gentleman's reply will be a most material element in enabling us to decide whether we shall divide on this Clause or not.
With regard to the expenses, my opinion is that 2½ per cent, is not a sufficient sum. I know that Mr. Gladstone proposed more, and he gave 5 per cent, in the case of the Irish Church. I do not ask for 5 per cent, here, because I agree that notwithstanding the difficulties which the Welsh Church will have in dealing with the subject, 5 per cent, is too much. My opinion, which I have fortified from the very best sources, is that 5 per cent, would indemnify them for the expenses they will have to meet. Let that question also go before an actuary who is thoroughly conversant with the subject. That, I think, would be a perfectly fair course, and let the right hon. Gentleman consider these two positions. Hon. Members on both sides agree that it would be in the interests of peace and harmony in the future, and would dissipate the possibility of friction' in the relations between the county councils and the Church, if some scheme of commutation were accepted. I press this most earnestly on behalf of the Church, and I think any rational man would press it earnestly on behalf of the State. I do not think it is creditable to this House that there should be a difference of opinion as to the terms upon which this should be done now that it has been reduced to such comparatively small figures. The figures are small to the nation, but they may be large for the Church. I do not think anybody should endeavour to manœuvre the Church into a position in which it should be compelled to say "Aye" or "No" in regard to terms which the man who offers them is really unable to see the full effect of, and which it is quite manifest that nobody on this side, after the continual chopping and changing which has taken place, can accu- 1870 rately measure at this moment. If there is an honest division of opinion upon this actuarial question between the two sides of the House, any honest and candid man will be ready to admit that there is fair ground for the position I have taken up in suggesting that we should let this matter go to an impartial umpire and allow him to decide. The Home Secretary has confessed his ignorance upon this matter, and therefore he ought to be willing to let it be decided by an impartial authority. I make that offer, and its acceptance or rejection by the Home Secretary will determine the attitude we shall take upon this question.

§ Sir ALFRED MOND
The right hon. Gentleman has assumed, and it has been assumed throughout these Debates, that commutation was not an Amendment put forward on behalf of the Church by those who are in favour of arranging a commutation scheme, and he said that it was agreed to by all parties in the House.

§ Mr. A. LYTTELTON
I did not say so.

§ Sir A. MOND
Well, the right hon. Gentleman, at any rate, said that if we all agreed to commutation, it would be a good thing. When the Debate on the Amendment moved by the hon. Member for Kilmarnock Burghs took place, it is true that my hon. Friends and myself gave a general assent to the principle of commutation on fair terms, and we said that such a proposition would not be objected to by us, but there was no demand, and there is no demand, from the Welsh Members who sit on this side of the House and from those we represent for this Commutation Clause. In fact, so far as there is any feeling at all, it is rather the other way. It is looked on, I will not say rightly or wrongly, as a concession to something asked for by the Church. Although many of us would like to see this question settled in this way, it cannot be put to us that we should be ready to leave the result to be settled in a vague and indefinite way, not by this House in open Debate, but by some persons unknown in some manner which we cannot ascertain. That is really asking more than we feel inclined to do, and, if the right hon. Gentleman talks of voting against this Clause, may I appeal to the Home Secretary to withdraw it. We do not want the Clause, and, if the terms are not good enough, I hope he will withdraw it, perhaps with some regret, but at any rate so that we may avoid the absurdity of going to a division 1871 in which those who ask for commutation vote against it, and in which we certainly should not vote in favour of it.
There is, of course, a certain amount of difficulty in all actuarial calculations. Actuaries, like all experts, always produce the result the party consulting them require at the moment, and I have no doubt the more actuaries you consulted the more different results you would get. An actuary's business is not merely to be on the ordinary business side, but to be on what I call the "ultrasafe side," the sort of safe side in which nothing can possibly go wrong, and in which he guards himself against even the most remotest possibility of his calculations working out against his client. Therefore I am not impressed when I am continually told by hon. Gentlemen opposite that their actuaries advise them they cannot accept a 3½ per cent, basis. I do not think we learn much in this Debate by going back on what has happened to insurance companies in the past. We are face to face to-day with a state of the money market and a financial position very different from what we have had in past years, and anybody starting in business or annuity lines to-day, or with any of these insurance ideas, would have to adopt a very different basis indeed from what has been the case in the past. There is no doubt you can get a higher rate of interest for money invested in gilt-edged securities than has been the case for a considerable time, and the question which presents itself to me from a business point of view is this: Is this high rate likely to continue for a number of years, or is it not? It is really not a question of actuarial calculations so much as of speculation in the gold reserves of the world and the likelihood of the maintenance of or a decrease in the money rates of the big banks of Europe. I read a speech by the chairman of the London City and Midland Bank, Sir Edward Holden, the other day, in which he pointed out that as things were going there was not only a likelihood of the present Bank Kate being maintained, but an increase in this and subsequent years.
It is absurd to say you cannot invest two million pounds in gilt-edged securities without enormously affecting the price of them. You can spread the money over quite a sufficient number of trustee securities so as not to affect the price. This transaction has got to be carried through once only, and that probably within the next eighteen months or two years, and I 1872 think it is perfectly safe to work on a 3½ per cent, basis. If you were going to work an insurance company, I might be more doubtful, but here you have much more definitely ascertained facts than any insurance company has ever had or will have. You know the number of people and you know their lives. You could get a very accurate estimate, not merely of the people, but of the actual probability of life in each case. You have a limited number of people of a certain class at a certain date with the money market in a certain condition; and it all has to be clone in a short time. No one dealing with annuities has ever had anything similar. All these facts had to be taken into consideration by those who prepared the Clause for the Government. Government annuities and annuities of ordinary insurance companies are run on commercial lines. There is also a point which seems to me one which may be argued both ways. We are told you have to take into consideration the risk of depreciation. You have also to calculate the probability of appreciation. If you invest at a high rate of interest you have the advantage of a high rate of interest on your investment, and obviously the probability is not that your security will go down, but that it will go up. It is not likely that gilt-edged securities will go down much more, but if they do go down a little your rate of interest on any surplus you may have to invest will naturally be more. I frankly say the representative body or those who dealt with it will have to take some risk. I do not see how in a transaction of this kind you can take no responsibility whatever. The county council will also have to take some risk in accepting this, but I do not think it is an unreasonable risk, and it is absurd to speak of the possibility of insolvency in the matter. After all, the difference in the worst case is not a very large one; it is probably a trifling one.
When the Irish commutation took place, a bargain was made with the incumbents by which the amount to which they were entitled was largely diminished in the interests of the Church. I do not know whether a similar arrangement could be made here, but undoubtedly many possibilities are open under the scheme of commutation which I should have thought would far more than compensate for any slight financial risk. We are certainly not convinced, and I have heard no argument to convince me, that 3½ per cent, is an unreasonable figure in view of all the facts. 1873 The right hon. Gentleman the Member for the Spen Valley (Sir T. Whittaker) admitted he considered the Clause a fair one. You can to-day buy Irish Land Stock giving you £3 12s. 6d. return; you can buy London County Council Stock giving you £3 15s. return; and the Public Trustee to-day obtains something like 4 per cent., or a little over, on the money which he has under his control for heirs, legatees, and annuitants. After all, a Public Trustee has to be just as careful as any other body, for he is dealing with funds belonging to heirs and annuitants over which he has public or official control, and he can obtain today about 4 per cent, or a little over. Surely, if that is the case, all this nervousness about 3½ per cent, is a little overdone. I think if 3 per cent, were taken, the representative body would make a very decent profit on the transaction, and would really make a good deal more money than hon. Members opposite wish them to make. I can only repeat, if hon. Members opposite do not take the view that this is a safe transaction, I think the only reasonable thing to do would be to withdraw the Clause altogether. Personally, I think if the matter was to be introduced into the Bill it ought to have been introduced at a much earlier stage. We, and I have no doubt hon. Members opposite, have had a certain amount of difficulty in dealing with a matter of such importance so late in the day and with relatively so little time to consider it in all its bearings. We were satisfied with the Bill as it was introduced, and we should be quite satisfied to go back to the Bill as it was introduced.

§ Mr. BONAR LAW
I think the hon. Member who has just sat down without intending it has made the strongest speech against the views he has endeavoured to put before the House. He has treated this question as if it were a case of a number of men engaged in a particular kind of business. I entirely agree with him, and at the present moment I should be very pleased indeed to join with him in starting a trust fund on such conditions, because I am sure we could invest the money with all the probability that we could do it on much better terms than those given by the Government. The hon. Gentleman himself, however, pointed out the real difference when he said there were risks involved in such a transaction. The representative body of the Church ought not to be asked to take risks which involve it in the possibility of loss in regard to a 1874 matter as to the principle of which the House is agreed. That is the whole difference of opinion. I was interested in the hon. Gentleman's business remarks, but some of them did not seem to me to be quite as strong as he imagined they were. He spoke, for instance, about insurance companies having no knowledge of the lives they have to take, but surely he is wrong. He says that with this limited number of lives we could find out all about them. If he has any acquaintance with any insurance company, he knows no one is taken until the most minute inquiries have been made with regard to him. More that that, an insurance company is not bound to take every life that comes before it, but here they would have to take them all. I venture to say, from the point of view of the representative body, as compared with an insurance company, the disadvantage is all on the side of the representative body. I really do not understand either the argument of the hon. Gentleman or the cheers with which the Home Secretary greeted it. Speaking of hon. Members on that side of the House, he said. "We do not want commutation; if you do not want it, then drop it." That is a very curious attitude to take up after the Government have accepted the principle of commutation. Why did they do it? They did it, I suppose, because they thought it was just. Other reasons may be imagined, but I will assume they did it because they thought it was just. They say there ought to be commutation; we admit it ought to be on fair terms. The terms have come suddenly upon us, and neither hon. Gentlemen on that side of the House nor we have had an opportunity of finding out what they mean or of being sure one side or the other. Surely, under these circumstances, it is not too much to ask before the House commits itself one way or the other that we should take some means of finding out what are the effects of the proposal of the Government. I quite agree you might get different opinions if you selected different actuaries, but, if they are selected by the Privy Council for the express purpose of deciding whether the terms are fair, surely they would be more likely to decide if they are fair than if the matter were decided in the spirit of the hon. Gentleman who has just sat down. That really is the whole question, and I am bound to say the, suggestion of the Home Secretary that you can take it or leave it seems to me not very worthy either of the Government or of the House of Commons.

1875

§ Mr. McKENNA
That was not my suggestion.

§ Mr. BONAR LAW
I did not hear the right hon. Gentleman, but from the speech of my right hon. Friend (Mr. A. Lyttelton) I understood him to say—

§ Mr. McKENNA
The right hon. Gentleman could not have taken a worse guide of what I said.

§ Mr. BONAR LAW
May I ask what the right hon. Gentleman did say?

§ Mr. McKENNA
I said the best course would be to leave the representative body to decide whether they approved the scheme.

§ Mr. BONAR LAW
I am very glad to hear that. I understand, then, the position is this: It will make no difference to the action of the Government whether we on this side of the House vote for it or do not vote for it?

§ Mr. McKENNA
Oh, no; on the contrary, it would make all the difference. I accepted what hon. and right hon. Gentlemen opposite said on behalf of, or said as advocates, or speaking as representatives of the Welsh Church. I accepted their view and they have so expressed themselves. So also have we in the same way. I accepted the Amendment of my hon. Friend the Member for Kilmarnock, supported as he was then by Gentlemen opposite, and I agreed to bring up a Clause. If that Clause is not acceptable to hon. Gentlemen opposite I shall not press it. I have pointed out that the Clause is a purely optional one for the representative body and will give them ample time to consider whether they will approve the scheme or not. I would suggest to hon. Gentlemen opposite that it is not advisable to reject the Clause without giving the representative body for whom they speak a chance of considering it.

§ Mr. BONAR LAW
The right hon. Gentleman in his few interruptions has convicted himself of inaccuracy as completely as any man could do. After saying that what my right hon. Friend had said was incorrect he repeated word for word everything that my right hon. Friend had said with regard to his speech. What is the position? The Government have agreed to give commutation. They have agreed because they think that in the circumstances it is just. We on this side of the House, we are not the representative body, we can only speak for the Church in Wales as individuals. We have no authority to speak for the Church as a 1876 Church upon these proposals, but we do say for ourselves that it is unfair and that if it were carried as it stands it would in our opinion put the Church at a disadvantage. The right hon. Gentleman says—and he apparently assumes it to be so—that he and his Government have no responsibility at all except to please their followers behind them, no responsibility to deal justly with the Church in this matter, and then he says to us, "Very well, if you do not vote for a Clause which we think is just, we will withdraw it." I say that is an unworthy position both for the Government and the right hon. Gentleman.

§ Mr. H. T. CAWLEY
I do not think the right hon. Gentleman or his Friends have quite done justice to the proposal of my right hon. Friend. If they vote against this Clause they are not voting against the proposal of the Government, but against the proposal that the representative body should have a choice whether or not they will accept those terms. It is proposed to leave that choice to their own representative body. Yet they are suggesting that they will vote against leaving any choice to the representative body that is to be formed. The right hon. Gentleman, the Member for St, George's, Hanover Square, suggested that this was going to manœuvre the Church into an impossible position because it would put the Church into a position of having pressure brought to bear upon it by the county councils. I cannot see in what period of time that pressure' is going to be applied. Within one month after Disestablishment the representative body have got to make their choice, and until that one month is up the county councils will not know whether or not the Church body have exercised that option. There would be therefore no period of time during which the Church body had not-accepted during which this wrongful pressure could be brought to bear by the county councils. Therefore, the suggestion of the right hon. Gentleman that the Church is being placed in an awkward position has no foundation whatever. There is no period of time during which the pressure can be brought to bear upon the Church body, and the Church body will not be placed in that position. It will simply have to determine for itself in the position in which it then is, whether or not these terms are good terms for the Church. Hon. and right hon. Gentlemen opposite, who do not know what the position or circumstances will 1877 then be, are going to vote now to deprive the Church body of that option in the future. They want to deprive the Church now, once for all, of the power of making this decision. It may be that when the times comes it will be of great benefit to the Church.
Personally, I hope that Gentlemen opposite will not vote against this Clause. I also hope that even if they do vote against it my right hon. Friend will not withdraw it, because, like many other Churchmen, I believe this is a businesslike proposition, which ought to go forward. Commutation on anything like a fair basis will be good for the Church and good for the nation. I do trust there will be some mutual forbearance and that some attempt will be made to get this Clause through. There is one difficulty I foresee. It is not only a question of figures, there is a question of principle involved. The point is, on what basis ought commutation to be made? Hon. Members opposite have said that the Church must take no risks, they have also said that there is a marked element of uncertainty in it; but if the Church is to take no risks, if we are to give a sum tinder which the Church will take no risk whatever, we will thereby probably deprive the county councils of a larger sum than the true value of the life interest. If you are to insure the Church against all risks you will have to provide a sum which will be higher than what we at present anticipate. I think the correct sum to give is the sum that at the present moment appears to be the exact equivalent in cash of the life interest, and not a sum which assures the Church against all risk and is therefore more than the cash equivalent of the life interest. Unless we can first agree upon that point, upon the point of principle whether it is to be the sum which involves no risk to the Church, or whether it is to be the exact cash equivalent of the life interest, which I think is what the Government have calculated, I do not see how we are to come to an agreement.

§ Lord HUGH CECIL
I quite agree with what the hon. Member who has just spoken said, that this is a case in which it is desirable the two sides of the House should exercise as much forbearance as possible. It is a question of an arrangement both in the interests of the Welsh county councils and of the Welsh Church, and there has really not been, so far as speeches have gone, any sign of difference of opinion being entertained on the point of principle. On that point of principle I think 1878 we are in agreement with the hon. Member that what we mean is that it should be on the basis of an actuarial expectation, that it should be according to the best actuarial commutation of what sum the life interest should be fairly commuted at. It has been admitted that the subject is a very involved and intricate one. No one oh either side of the House will say that it is easy to determine that the Clause as it now runs would or would not give the Church precisely what we all agree the representative body ought to have. But on this side of the House we are obliged to consider what the actuarial opinion is, and we find that the weight of the actuarial opinion we have is that this is altogether impossible; that the representative Church body could not possibly accept it; that it would not have a genuine option at all. The proposal is so bad that it could not be adopted by the representative body when the time came. That being so, we think it is unfair and unreasonable to put upon the representative Church body the onus and the odium of refusing what it is impossible to accept. It would mean they would begin their career in bad odour with the county councils. The county councils and the Welsh nation would probably at that time be in favour of commutation, and you would put the representative body in the position of being obliged to do an invidious and disagreeable thing. I do not think that is a fair position to put them in at the very outset of their career. I am not going to pronounce an opinion of my own; it would be impertinent for me to do so. Even the Member for Spen Valley admits that his view of the matter i3 that it would just do. What we suggest H that the Government should extend its machinery somewhat. I do not think it has been pointed out that the Fourth Schedule as it stands on the Order Paper might be used a little more extensively than the Government have proposed. In that Fourth Schedule on the Order Paper there is a proposal to allow the actuary to determine the question of the greater longevity of the clergy as compared with other classes and any prospective decrease in the death rate. Why, if you are going to allow the actuary to do that, should you not allow him to determine the whole matter I Surely that is a reasonable and conciliatory proposal. I cannot conceive what the objection is to allow an actuary appointed by the Privy Council to consider the whole matter and to decide as circumstances may require.
1879 I think we have in this matter a striking illustration of the extreme inconvenience of legislating under the guillotine. This is not a highy controversial matter. It is a matter, we all agree, of business. It is a matter to be determined by the best business opinion. Everybody is agreed upon the principle that it ought to be an absolutely fair arrangement for the two parties, and yet in nineteen minutes we must come to a final decision one way or the other without any appeal, although this blessed Bill is likely to be before Parliament for another fifteen months. Under this miserable system of legislation you will have to decide, in nineteen minutes more, and irrevocably, so far as we are able to judge, a question which is strictly technical and a matter of business, and which can only be decided by careful actuarial inquiry and by the most impartial actuarial opinion. It is dumped down upon this House now for the first time by the Government, although they might have thought of it beforehand and put it into the Bill from the beginning. But here it is at the last moment, and we are put in the great difficulty of not knowing how to vote or what to do with it for want of proper expert information. I think the proposition of my right hon. Friend is the only possible way out of the difficulty. Extend the Fourth Schedule so as to allow the whole matter to be subject to actuarial decision, and that, we all suppose, will give us a skilled and well-formed decision. It is a proposal, I think, which all sides might accept.

§ The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Ellis Griffith)
In answer to the Noble Lord, I would say that I do not think it is well we should know where the matter stands at once. We all agree upon the actuarial relation of the question. But what is a fair actuarial basis? What would it be right to pay for the life interest? In this proposal of the Government we are taking into account both the longevity of the clergy at present and the greater longevity of the clergy in the future. It is not proposed to force anything upon anybody. I did not quite catch what the right hon. Gentleman said to the effect that there was no one on the other side who had spoken a word on behalf of the representative Church body. I should have thought there was somebody who could speak with authority.

1880

§ Lord HUGH CECIL
What we are dealing with is the value of the life interest of the clergy. Nobody here can pretend to speak on behalf of the whole of the Welsh clergy.

§ Mr. ELLIS GRIFFITH
I do not propose that anyone should pretend to speak on their behalf, but surely this is a business proposition. We are not here forcing upon anyone the results of actuarial investigation; we are merely giving them the opportunity of making up their minds and consulting experts upon this question. That is the real point. We are not forcing anything upon the Welsh Church or upon the representative body; we are giving them an option. It is only an option. They can accept it or not. The positions of hon. Members opposite I think is this: they say, "Your calculations are so far wide of the mark, so far wide of what is right in the circumstances, that we will take upon ourselves the responsibility of voting against it and of saying that the representative body is not to have an option." If they do that the responsibility is theirs.

§ Mr. A. LYTTELTON
No; what we said was that it was forcing the representative body into an odious position, in which the county councils would exercise natural pressure upon them.

§ Mr. ELLIS GRIFFITH
Let us deal with that point. What is there odious in the relationship of the two bodies in this matter? No county council in Wales has ever asked for commutation, and they will not be disappointed if they get no commutation. I hope hon. Members opposite will remember that this is not a matter which concerns one county council in one particular county; it is a matter for the whole of Wales. No one county council will be aggrieved if commutation does not come off. Nobody could have heard this Debate this afternoon without coming to the conclusion that commutation is a principle much more popular on that side of the House than on this side of the House. So far as the Welsh electors are concerned they have made no representation at all in the matter. The House seems to occasionally forget that this principle of commutation was introduced, rightly or wrongly, by us in answer to a request from the other side. We genuinely thought that we were meeting the Welsh Church. It is quite true that the terms do not satisfy the Opposition, but the question is, not whether the terms satisfy you, but 1881 whether they satisfy the representative body. You say you have no right to represent the representative body, and yet you say you will take upon yourselves the responsibility of saying that these terms will not be accepted. The Noble Lord (Lord Hugh Cecil) says, "Let us go to arbitration; let us get the Privy Council to appoint an actuary." [HON. MEMBERS: "Why not?"] We say we must take the responsibility upon ourselves. These are the terms which we think are the right terms, and no Government has a right to propose legislation, and then say, "We will go to an actuary." We take the responsibility for this Bill, and we say we are not going to transfer our responsibility to any actuary. We say that the terms we submit are fair, and it is for hon. Gentlemen and right hon. Gentlemen opposite to say whether they think it represents a scheme which can be approved. How is it unreasonable for them to leave it to the representative body to take the responsibility of accepting or refusing it? If hon. Members opposite come to the conclusion that this is an option they will not trust to the representative body, we shall have to re consider our position. We do not wish to force the scheme against the wishes of hon. Gentlemen opposite.

§ Colonel PRYCE-JONES
The position which the Government are taking up in this matter is a most extraordinary one. Commutation, speaking generally, is the wish of every hon. Member. It may not be the wish of one hon. Member for Wales, but I think everybody else wishes it in the interests of the Church, and in the interests of the Welsh county councils. Commutation has been proposed by the Government at the request of a large body of hon. Members on the other side of the House, as well as of my hon. Friends on this side. In response to the strong feeling expressed in the House a few weeks ago, the Government have framed this Clause that we are now discussing. We are told by hon. Members on this side of the House and by hon. Members opposite, that the Clause does not meet the wishes of the Church. I believe that the Government hoped to have met the wishes of their own Friends and of my hon. Friends, but it is very much like a friend of mine asking me to dinner, knowing very well that I shall not be able to accept the invitation. The Government have agreed to the principle of commutation, but have done it in such a manner 1882 that it is impossible for the Church to accept it. I hope we are going to accept it in any case, but it is extremely unfortunate that the Government should have placed themselves in the position of forcing this scheme upon us, when it is demonstrated that there is a dispute in regard to how it works out in detail. My right hon. Friend (Mr. A. Lyttelton) has come to the rescue of the Government, and has asked them to refer this little matter of actuarial and financial difference to arbitration. I still hope that the Home Secretary will make this concession before we go to a Division. I am perfectly sure that everybody agrees upon commutation, and it is only a small matter of detail which divides us in regard to it. I make a final appeal to the right hon. Gentlemen to accept the compromise suggested by my right hon. Friend.

§ Mr. J. M. HENDERSON
I advise hon. Gentlemen and right hon. Gentlemen opposite to accept this Clause. There are two elements that enter into the calculation of annuities: longevity and the rate of interest at which the money can be invested. There are great risks in either case. So far as longevity is concerned, that can by the terms of the Clause be referred to an actuary appointed by the Privy Council. That gives you what you want on that point. There is a risk which I for one would not advise the Church to take. We have heard about annuities not paying. The reason why they did not pay in recent years was that for a long period, starting in 1893, the Bank rate stood at 7 per cent., and you could not get 3½ or 4 per cent., so much so that the insurance companies invested their money abroad. If this Clause is accepted, you will have time before the Bill is dealt with in another place to obtain actuarial calculations regarding it. I do not think you will have any difficulty in getting annuities on a 3½ or 3¾ per cent. basis. This may not operate for about three years, and by that time the Bank rate may have gone back again. I do not think the Church ought to take any risk upon this matter, and I do not know why you should not leave the Bill as it is, and let the clergymen get their annuities for life. I remember some years ago buying an annuity for an old lady for three years—that was until she was seventy-five, but she lived until ninety-five. I suggest that the Clause should be accepted now; it is reasonable as matters stand at the present time. On the whole, if I were the Church I would accept it.

1883

§ Mr. A. LYTTELTON
I speak by the indulgence of the House. After hearing the speech of my hon. Friend opposite, and having considered the matter as best I can in the extraordinarily difficult circumstances, I venture very respectfully to advise my friends to vote for the Second Heading of this Clause. We shall have an opportunity of marking our sense of what we think is the unfairness of the Government's attitude by voting against the Fourth Schedule which contains the terms.

§ Question, "That the Clause be read a second time," put, and agreed to.

§ Mr. GLADSTONE
I beg to move to leave out the words "one month" ["If before, or within one month after, the date of Disestablishment"], and to insert instead thereof the words "three months." I (have already submitted one or two reasons why there should be a more ample margin than one month to enable the representative body to decide whether it is going to take up commutation or not. In view of the fact that circumstances might arise which would delay the formation of the representative body, I desire to ask the Home Secretary if he will extend the period to three months.

§ Sir EDWARD BEAUCHAMP
I beg to second the Amendment.

§ Mr. McKENNA
It must be quite obvious to my hon. Friend that long before this point comes to be considered by the representative body every actuarial view will be obtained, and all the materials will be before the representative body to enable them to form an opinion, not within a month, but within a single day. I do not wish to leave this question open.

§ Question, "That the words 'one month' stand part of the proposed Clause," put, and agreed to.

§ Proposed Clause added to the Bill.

§ It being after Seven of the clock, Mr. SPEAKER proceeded, pursuant to the Orders of the House of the 28th November, 1912, 30th January, 1913, successively to put forthwith the Questions on a New Clause and on any Amendments moved by the Government (of which notice had been given) necessary to dispose of the business to be concluded at Seven of the clock at this day's sitting.