§ 18. Mr. GODFREY LOCKER-LAMPSONasked why approved societies are not being allowed a greater rate of interest than 3¼ per cent, per annum on moneys remaining in the hands of the Commissioners; whether it is possible safely to invest money at the present time to produce over 4 per cent, interest; and whether he is aware of the waste arising on the large National Insurance funds in the hands of the Commissioners, because they are being invested at a low rate of interest in funds authorised as investments under the Savings Bank Act, 1863?
Mr. BENNThe rate of interest has been fixed in the first instance at 3¼ per cent., because it was not thought that a higher rate could prudently be allowed until further experience has been gained of the terms upon which investments can be made. The rate will be varied from time to time as the state of the income account of the investment fund permits. The limitation of the powers of investment in respect of these funds (for the custody of which the Government is responsible) to Parliamentary securities is imposed by Section 54 (3) of the National Insurance Act, 1911, and follows the usual practice of Parliament in regard to such funds.
§ Mr. LOCKER-LAMPSONIs the hon. Member aware that in the past the friendly societies found perfectly safe investments for money at 4¼ per cent.?
Mr. BENNThat may be so, but as I have said, the rate of interest may be varied when further circumstances are known.