FINANCE [SAVINGS BANK ANNUITIES]. (Hansard, 24 May 1933)

§ Sir S. CRIPPS
Are we not to have any explanation of the Resolution?

§ Mr. HORE-BELISHA
Certainly. The Resolution relates to a charge on the Consolidated Fund in respect of certain life annuities granted shortly after the War Loan conversion. As the Committee is probably aware, these annuities are sold in accordance with certain tables which set out the return that the purchaser will receive. At the time of the War Loan conversion the table in force showed the amounts payable on different 1210 prices of Consols up to a maximum of 7l½ per cent. It was not anticipated in the pre-conversion era that Consols would ever rise above that maximum. The Post Office Savings Bank are not entitled to pay these annuities until the tables have been laid before both Houses of Parliament and been gazetted for 30 days. It was impossible to fulfil that Statutory condition, and therefore we had to have recourse to paying these annuities out of the Civil Contingencies Fund. Annuities amounting to £909 quarterly were granted under the new tables. The Committee will appreciate that we could not give advance notice either to the House of Commons or to the public of the intention to convert the War Loan, and it was therefore necessary to take these extra legal powers which we now ask the Committee, with complete confidence, to authorise, because there was no alternative before us.

§ Sir ARTHUR MICHAEL SAMUEL
I suppose the Resolution refers to Clause 36 of the Finance Bill. Apparently, as far as I can understand what the Resolution means, the annuities were approved on the 11th July, 1932, and the alteration was published in the Gazette on the 12th August, 1932. Then I come to a Treasury paper published a few days ago, dated the 30th March, 1933, from which it appears that these tables are based on rates which were fixed in 1872 and 1884. Now, we are asked to approve, in May, 1933, what was done in July and August, 1932. It looks to me suspiciously like retrospective legislation, 1211 caused by some oversight on the part of the Department, and we have to put right the oversight.

§ Mr. HORE-BELISHA
No.

§ Sir A. M. SAMUEL
Then what does it all mean? I notice that Clause 36 of the Finance Bill refers to "savings bank annuities," which is in the singular, but in the Resolution there is reference to "savings banks annuities," which is in the plural. I do not know whether it means the Post Office Savings Bank, and Trustee Savings Banks. In the White Paper, I find that it is stated specifically that the grant of deferred life annuities by the Post Office was discontinued in July, 1912, and the grant of insurances from the 1st January, 1929. To what, then, do these annuities refer? There is nothing in the Post Office White Paper on the point. Are we dealing with trustee savings banks? We ought to have the matter cleared up. We want to know whether this is retrospective legislation owing to something unforeseen or ovErieoked, or whether it refers only to the Post Office—if so, what business is the Post Office doing?—or whether if refers also to trustee savings banks.

§ Sir S. CRIPPS
I did not understand the Financial Secretary when he said that. these annuities could not be issued legally at the time. By the 11th August these annuities could perfectly well have been issued legally. Why was it necessary between 11th July and 11th August, knowing that they could not legally be issued until 11th August, to issue annuities under the new table, and then come to the House nearly a year later and ask for the authority to issue them?

§ Mr. HORE-BELISHA
I can answer that question at once. The tables for savings banks annuities do not have effect until they have lain on the Table for 30 days. They were laid on the 11th July, but before the 30 days had expired Consols rose above the maximum of 7l½ per cent. covered by the existing tables, and it was only at that stage that the law was exceeded, but during that period annuities amounting to £909 quarterly were granted under the new tables.

§ Sir S. CRIPPS
Why?

§ Mr. HORE-BELISHA
I agree that there was no statutory authority to grant these annuities, but obviously it is in the interest both of the annuitants and of the State that the annuitants should not be deprived of their annuities simply because, owing to a tecnicality, the tables did not cover Consols above 71.½ per cent. I hope that I have made it clear. I cannot in the least follow the complaint of my hon. Friend the Member for Farnham (Sir A. M. Samuel). He has unearthed some ancient Statutes, but the significance of what he said, I must genuinely confess, I was unable to appreciate. If I could have appreciated it, I would answer it. He asks what is the meaning of the "s" at the end of "bank." It so happens that in the copy of the Resolution which I have before me there is no "s," and, therefore, I take it if is the result probably of a clerical error and not of any Machiavellian intentions on the party of anyone. I assure the hon. Member that the result was a very great saving to the country.

§ Major. HILLS
I am sorry, but I do not understand it yet. After the 11th July last certain annuities were granted illegally. Who was responsible; the Treasury or the Savings Bank I Someone has granted annuities which this House has never sanctioned. I listened carefully to the explanation of the Financial Secretary. I may be stupid, but I cannot understand it. Some one has gone beyond the law—either the Savings Bank or the Treasury; and I think the Committee should know who it was.

§ Sir S. CRIPPS
May I ask the Postmaster-General to tell us whether it is his personal responsibility or whether some deputy of his has done this?

§ The POSTMASTER-GENERAL (Sir Kingsley Wood)
I should like to have the advice of the hon. and learned Member privately as to whether I am bound to incriminate myself.

§ Sir A. M. SAMUEL
The intervention of the Postmaster-General does not really carry any weight. I know a little about Treasury business after all, but, 1213 apparently, the Financial Secretary has never seen the White Paper from which I have quoted, which is signed by himself, and issued on 30th March. In this White Paper it says specifically that the granting of deferred life annuities was discontinued in July, 1912, and the granting of insurance from the 1st January, 1929. Now he tells us that these annuities, or these contracts, which are to be deemed to have been lawfully granted, have something to do with the Postmaster-General, and the Postmaster-General gets up and talks about it. I should like to know what it all really means.

§ Mr. TOM SMITH
I should like to know why the Law Officers of the Crown are not present when a matter like this is being discussed?

§ Mr. HORE-BELISHA
The answer to the hon. Member for Farnhacn (Sir A. M. Samuel) is that he is reading a White Paper about deferred annuities, which were suspended at a certain date, which has nothing whatever to do with the matter.