§ 28 and 29. Mr. RHYS DAVIESasked the Minister of Health (1) whether he is aware that, of the securities held for National Health Insurance funds on 31st December, 1921, there is no less than £33,000,000 invested in gilt-edged securities, the majority of which bears interest at the rate of five per cent., which will be redeemed by the Government in less than six years' time; what steps have been taken by those responsible for the investment of funds on behalf of approved societies to ensure the retention of a five per cent, yield after the year 1928;
(2) whether, having regard to the fact that the amounts invested by the Ministry are in reality the funds of approved societies, he will consider the advisability of appointing a joint committee consisting of representatives of the Ministry of Health and of approved societies, with a view to ensuring that these investments are made to the best advantage of the societies and of avoiding the practice of having such a large sum as £33,000,000 redeemed by the Government at one time only to be reinvested at a lower rate of interest, and with a view to avoiding delays in notifying approved societies of sums due to them by way of interest and otherwise?
§ The following is the answer:
§ I may observe that of the £33,000,000 in question £27,400,000 is invested in bonds which have rights of conversion into 5 per cent. War Stock at the rate of £105 5s. 3d. for every £100 converted; and the National Debt Commissioners neglect no opportunity of effecting exchanges of such investments, where deemed expedient. At the present time about half of the National Health Insurance finds held by the National Debt Commissioners are invested in long-dated securities. In 2244 making investments the Commissioners must have regard and give due weight to different considerations, e.g., the particular requirements of the capital and income accounts respectively from time to time, the necessity for keeping a due proportion of the funds in a liquid form, easily realisable at any time, and the necessity of avoiding capital loss on such realisation. The large amount of National War Bonds now held and maturing in the next eight years were purchased with special reference to the position of the capital account, as the permium of 5 per cent, payable on the redemption of such bonds will contribute towards meeting the nominal losses incurred owing (a) to the fall in the market value of securities generally and (b) to the conversion of a large amount of 2½ per cent. Consols held for the fund into 4½ per cent. War Loan. I see no necessity for the appointment of a joint committee for the purpose of advising the expert Department in the exercise of its statutory functions.