HOSPITAL ENDOWMENT FUND

HC Deb 21 September 1948 vol 456 cc827-47

10.21 p.m.

Sir John Mellor (Sutton Coldfield)

I beg to move, That an humble Address be presented to His Majesty, praying that the Regulations, dated 30th June 1948, entitled the National Health Service (Control and Management of Hospital Endowment Fund) Regulations, 1948 (S.I., 1948, No. 1489), a copy of which was presented on 1st July in the last Session of Parliament, be annulled. These regulations provide for the control and management of the Hospital Endowment Fund which has been set up in pursuance of the provisions of the National Health Service Act, 1946. I understand that at the present time the Fund amounts to something like £15 million, but perhaps the Parliamentary Secretary to the Ministry of Health in the course of the discussion will tell us the exact figure. At any rate, the figure is a substantial one and is the proceeds of donations made in the past by public-spirited persons to the voluntary hospitals. The Act of 1946 largely defeated the intentions of those benefactors but, none the less, it remains the duty of this House to do its utmost to see that the Fund is well administered and properly invested for the benefit of hospitals in the future.

Looking at these regulations, I would say in passing that they appear to me to be very confusing. For example, regulation 6 states: Any expenses incurred by the said Comptroller General or Assistant Comptroller in exercising the powers conferred on him by regulation 4 In regulation 4 one finds no reference whatsoever to the Comptroller General or Assistant Comptroller of the National Debt Office. Regulation 4 refers to matters entirely different.

I have found it difficult, owing to the confusing character of these regulations, to summarise their contents, but at least this point is clear, and this is the main object of my attack on the regulations tonight. They entrust to the National Debt Commissioners the management of the Fund's investments. In regulation 8 one sees it stated that the Commissioners may realise securities held by them on account of the Minister at any time for the purpose of investing in. other securities. These regulations are legally within the power of the Minister to make; there is no doubt about that. One sees in Subsection (2) of Section 56 of the National Health Service Act, 1946: Any money forming part of the Hospital Endowment Fund may from time to time be paid over to the National Debt Commissioners, and by them invested in any securities which are for the time being authorised by Parliament as investments for savings banks funds. I emphasise the word "may." The Minister clearly has a discretion either to take the course he has taken in making these regulations and entrust the investment of the Hospital Endowment Fund to the National Debt Commissioners, or he may take some other course. Under Section 7 it is provided that the Minister may make regulations providing for the control and management of the Hospital Endowment Fund by the Minister or any person authorised to act on his behalf.

While I recognise that, legally, the Minister has been entitled under the Act to make this provision in the regulations, I say that he has exercised his discretion in a very misguided manner. Since the Act was passed, in November, 1946, we have had experience of the conduct of investments of somewhat similar funds by the National Debt Commissioners. I refer in particular to the investment of money belonging to the Unemployment Fund. The Unemployment Fund accounts for the year ending 31st March last show that the National Debt Commissioners have used the money of the Fund for the purpose of influencing the stock market to accord with general Government financial policy.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

May I interrupt the hon. Baronet? I do not know whether it would be in Order for me to reply to this, because in my submission it cannot be raised on this Order; so perhaps it would be proper for me to indicate that on at least three separate occasions I have categorically denied that what the hon. Baronet is now saying is true.

Sir J. Mellor

I do not mind in the least—[HON. MEMBERS: "Withdraw."] Certainly not. I do not mind the right hon. Gentleman saying it for the fourth time. He is perfectly entitled to say it any number of times and I am equally entitled to contradict him. There can be no other explanation of the conduct of the National Debt Commissioners. An examination of the Unemployment Fund accounts for the year ended 31st March last shows that no less than £55 million was invested in "Dalton" undated stock. During the year ending 31st March last the whole of the new money was invested in long-term securities and mainly in "Dalton" undated stock. Not a single short-dated security was bought. There is only one explanation of what was done which I can believe—that is, that the Government, through the National Debt Commissioners, desired to support the long-term gilt-edged market.

Mr. Speaker

For the hon. Baronet to criticise the Government's investors in taking one course of action is quite outside this order.

Sir J. Mellor

I am complaining about this order entrusting the National Debt Commissioners with the investing of the Hospital Endowment Fund, and my reason for objecting is the conduct of the National Debt Commissioners in their investment of the Unemployment Fund. Surely if an order entrusts this to a body, this House is entitled to examine the conduct of that body.

Mr. Speaker

The investment of the Unemployment Fund is quite outside the order. It is out of Order.

Sir J. Mellor

I should like you to amplify your Ruling, because I would point out again that this order entrusts to the National Debt Commissioners the investment of this Fund. Surely the House is entitled to consider what the National Debt Commissioners have done in the past. I would point out this further, that the National Debt Commissioners—

Mr. Speaker

The Act provides that the money shall be handed over to the National Debt Commissioners, and therefore their action is quite outside the terms of this order. That is a matter which is governed by the Act itself and, therefore, is outside the terms of this order.

Sir J. Mellor

May I draw your attention Sir, to the terms of Section 56, Subsection (2), of the Act, which I read before? Any moneys forming part of the Hospital Endowment Fund may from time to time be paid over to the National Debt Commissioners … and so on. That is my whole point. I admit the Minister has discretion to make regulations with this effect, but my point is that he ought not to have exercised his discretion in this way.

Mr. Speaker

The hon. baronet is criticising the Act. Hon. Members cannot, under this order, criticise the Act and what the Minister may do or is entitled to do under the Act. That is out of Order on this Prayer.

Sir J. Mellor

With the greatest respect, may I put my point again? Where an Act of Parliament entrusts to the Minister the discretion either to do or not to do something, if he does it, surely this House is entitled to say he ought not to have done it.

Mr. Speaker

That would be criticising the Act and not criticising the order on which the hon. Baronet is praying.

Mr. Assheton (City of London)

On that point of Order. Is it not the case that the Act gives the Minister certain discretion and that the hon. Baronet is seeking to argue that the Minister should not use his discretion in this particular sense. Would that not be in Order?

Mr. Speaker

That would be discussing the Act. It would be a very useful Amendment on the Committee stage of the Act, but it has nothing to do with this.

Sir J. Mellor

This is a matter of such far-reaching importance that I must ask you to give further consideration to your Ruling. This Act empowers a Minister to do something, but does not oblige him to do something. Surely I am entitled to—

Mr. Speaker

If the hon. Baronet says the Act charges the Minister to use his discretion but does not oblige him to use it, that is a criticism of the Act and therefore is out of Order on this Prayer.

Sir J. Mellor

I am not criticising the Act. I am criticising the exercise of the Minister's discretion under the Act. The Act gives discretion. The Act says "may," not "shall." If the Act had said, "moneys forming part of the Hospital Endowment Fund shall from time to time be paid over to the National Debt Commissioners," I could not have said a word against these regulations. But as the Act quite clearly says that, any moneys forming part of the Hospital Endowment Fund may from time to time be paid over to the National Debt Commissioners, I submit that I am entitled to say that the Minister should have taken another course which is open to him. Surely this is a matter of far-reaching importance. I submit that I am entitled to argue that the Minister should not, in these circumstances, have availed himself of his right under the Act, but should have taken a different course.

Mr. Speaker

I think the argument here is that the Act says "the Minister may," and the hon. Baronet is arguing that he may not. That is criticising the Act.

Mr. Assheton

The hon. Baronet is seeking to argue that the Minister would be better advised in the interest of the benefactors and of the Fund to proceed in another fashion. As the Minister is given discretion under the Act, the hon. Baronet is entitled to argue that the Minister should have pursued another course.

Mr. Speaker

I think that that surely is nothing to do with the order.

Sir J. Mellor

I have not said that the Minister may not. I have said distinctly that he is legally entitled to take the course which he has taken. Surely, therefore, I am in no way challenging the Act. I have said that the Minister has the discretion. I am criticising the way he has exercised that discretion. Therefore, I submit that I am entitled to proceed on that course. Since the Act was passed in 1946, we have had experience of the handling of the Unemployment Fund by the National Debt Commissioners. I pointed out the very heavy loss which has been incurred to that Fund through investment in undated "Dalton" Stock, in other words, Treasury 2 per cent. Stock. I feel that in the light of that experience, the Minister ought not to entrust the investment of this Fund to the National Debt Commissioners, but should entrust it to an ad hoc body. I feel that he should entrust it to some body—

Mr. Speaker

Again I think the hon. Baronet is in error, because while it says that the money may be paid over to the National Debt Commissioners, it does not say that they may be handed over to anyone else. That therefore is outside the order.

Sir J. Mellor

It says in Section 7, Subsection (5), The Regulations shall provide for the control and management of the Hospital Endowments Fund by the Minister or any person authorised to act on his behalf. At least, Mr. Speaker, I think you will agree that the Minister can control the investment of the Fund himself. If he does not exercise his power to hand over the Fund to the National Debt Commissioners, at least he can retain control of the investment himself or authorise a person to act on his behalf. The important thing is—

Mr. John McKay (Wallsend)

On a point of Order—

Mr. Speaker

If the hon. Member will let me listen to the argument I might perhaps deal with it without assistance.

Sir J. Mellor

The important thing is that this Fund should be beyond the reach of Treasury control. The National Debt Commissioners and the Treasury are, for all practical purposes, identical, because the active members of the Commission are the Chancellor of the Exchequer and the Governor and Deputy-Governor of the nationalised Bank of England. The others are you yourself, Mr. Speaker, the Lord Chief Justice, the Master of the Rolls, and the Accountant-General of the Supreme Court; and they are never consulted, are not in any way let into the secrets of the three active members of the Commission, and apparently are only occasionally asked for a formal signature.

The Financial Secretary apparently considers it is quite all right for funds of this sort to be used for the purpose of implementing Treasury policy. On 14th May this year he said that it was quite obvious that the Treasury, acting for the Government, must have control of these funds, and he said that, referring to the Unemployment Fund, the policy must be laid down by the Government of the day. I submit that that ought not to be acceptable to this House, and that funds of this character ought to be regarded as trust funds and administered solely with regard to the advantage of the funds themselves and without any extrinsic purpose whatever.

There is one curious thing about these Regulations Which I have noticed, and that is that in regulation 5 we find certain matters entrusted to the Comptroller General and the Assistant Comptroller of the National Debt Office, whereas under regulation 8 and other regulations, matters are entrusted to the National Debt Commissioners. The Comptroller General and his Assistant are the servants of the National Debt Commissioners, so we find the strange position that, in one of the regulations matters are entrusted to the servants and, in the others, to the masters. Furthermore, one finds it difficult to understand how the Comptroller and his Assistant are to serve the Minister of Health on the one hand, and the National Debt Commissioners on the other. I have suggested on previous occasions in this House that the Public Trustee might well be a useful person to appoint for the charge of these matters.

Mr. Speaker

To suggest anybody else is going outside the Act. The Act refers to the National Debt Commissioners only and one may not on this occasion, suggest anybody else.

Sir J. Mellor

But, Mr. Speaker, the Act does authorise the Minister to make regulations for the control and management of this Fund, either through himself or through any person authorised by him on his behalf. I was simply suggesting that, possibly, the Public Trustee would be the appropriate person to take this duty, but all I need say is that whoever does it, the Minister ought not to appoint the National Debt Commissioners who are under the virtual control of the Treasury.

Mr. Speaker

This is not the occasion to attack the National Debt Commissioners. There is no other body to whom the money may be entrusted, and to attack the Commissioners is to attack the Act itself and the House has passed the Act.

Sir J. Mellor

I will not refer to that again, Mr. Speaker, because I have come to the end of my argument on that point, but I shall be in Order if I say how nice it is to see the Financial Secretary to the Treasury sitting side by side with the Parliamentary Secretary to the Ministry of Health. The Financial Secretary is, I understand, going to reply, but these regulations are made by the Minister of Health. I am criticising the Minister of Health for the form and substance of these regulations, and I should have thought that his Parliamentary Secretary was the gentleman to reply. It is the Minister of Health I am charging, but if the Financial Secretary is replying for him, I have no complaint. I feel that the fact that the Financial Secretary is here, apparently to reply on behalf of the Minister of Health, if anything, underlines my case, which is that the Treasury are dominating the use of funds like this Fund. That is what I am here to criticise tonight. The fact that the Treasury are present to answer emphasises my complaint.

10.46 p.m.

Mr. David Renton (Huntingdon)

I beg to second the Motion.

In doing so, I would ask the House to bear in mind that there are two cardinal principles which we should observe when studying regulations, especially regulations of this kind. The first is that the Act under which the regulations are made was only an enabling Act giving certain powers to the Minister and that the real essence of what is to be done, and, indeed, the essence of the greatest controversy between us when the Act was before the House, is contained in these regulations and in similar regulations under the Act. The second principle is that the National Health Service and the general National Insurance and security scheme can only work for the benefit of the people if we are meticulous in safeguarding the value and the quantity of the people's money. For that reason we should be very careful indeed to guard against any possibility of a depreciation of this money by any means, and I submit that at least the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) has put the House upon inquiry to consider whether the most wise course is being taken on this occasion, as proposed in these regulations.

The hon. Baronet mentioned that possibly as much as £15 million is involved. If that is the sum, I can only say that it is something of a disappointment that it is not very much more, because during his Second Reading speech on the Bill the Minister himself said—and again we ask, "Why is he not here?" and then we are supposed to add, "God bless him ": Furthermore, something like £32 million belonging to the voluntary hospitals as a whole is not going to be taken from them. On the contrary, we are going to use it, and a very valuable thing it will be; we are going to use it as a shock absorber between the Treasury, the central Government and the hospital administration. I cannot forbear from adding, "some shock absorber." At any rate, that was the Minister's intention, and he added this: They will be given it"— that means the hospitals will be given it— as free money which they can spend over and above the funds provided by the State."— [OFFICIAL REPORT, 30th April, 1946; Vol. 422. c. 62.] He made it clear in the Committee stage, in elaborating what he said on Second Reading, that overdrafts incurred by the hospitals between the passing of the Act and the appointed day-5th July for the purpose of these funds—were to be deducted from any assets which the hospitals held on the date of the coming into operation of the Act. I should like to ask the Financial Secretary whether, in fact, overdrafts have been incurred to any substantial extent and whether the net amount which has been paid over to the National Debt Commissioners is one in which these overdrafts have been taken into consideration.

The Minister also made it abundantly plain that not only would this money be distributed as between the different regions from the regional hospital boards, but used these words: When we come to the whole scheme I think it will be seen that we are not only speaking for the regions, but, as far as possible we shall try to push the endowments down into the management committees, where they will fertilise the whole service."—[OFFICIAL REPORT, Standing Committee C: 23rd May, 1946, c. 263.] One might have hoped, bearing in mind that these regulations are intended to be fairly comprehensive as to the disposal of the funds of the voluntary hospitals, amounting to something between the figure given by the hon. Baronet of £15 million and the figure of £32 million given by the Minister, that we should have had some idea whether, and, if so, how, the regional hospitals boards are to get their share in order to carry out the intention expressed very clearly and fairly by the Minister of Health on the Committee stage.

The Parliamentary Secretary to the Ministry of Health (Mr. John Edwards)

May I explain that these regulations do not purport to deal in any way with the disposal of the funds. They are solely concerned with the management of the funds, and it would be quite wrong, and indeed impossible, tonight, to have a discussion about the disposal of the endowments which these regulations do not in any sense cover.

Mr. Renton

I am very much obliged to the Parliamentary Secretary, but these regulations have a comprehensive title "The National Health Service (Control and Management of Hospital Endowment Fund) Regulations, 1948," and we find the Commissioners shall, under regulation 7 pay dividends and interest, and under regulation 8 pay capital sums to the Minister. It means, presumably, that there are going to be two—

Mr. Edwards

May I make it quite plain that what the regulations do is to give the necessary authority for the Commissioners to act for the Minister, and that is all. It would be impossible to discuss how the endowments are, as the hon. Member has said, going to get down to management committees. That would be outside the scope of the regulations.

Mr. Renton

That clarifies matters a great deal. This means that we can look forward to another statutory instrument being introduced when we can make another Prayer on which we shall have something to say about the disposal of the funds down to regional boards.

This money, as I have pointed out, was to be pooled, and this pool was to be used as a "shock absorber" between the Treasury, the central Government and the hospital administration. Some of us were a little puzzled to know what the Minister meant by that on Second Reading and now we have an appropriate occasion to ask the Financial Secretary to the Treasury to explain what is being done to the funds, and what is the meaning of the phrase "shock absorber." I hope that hon. Members opposite have taken good note of regulation 5 (b), which gives, as part of the machinery for absorbing the shock, powers for brokers and other agents to be used by the National Debt Commissioners. I hope that this will not greatly offend their sensibilitles or recall shades of the Liverpool Cotton Exchange.

When the Minister obtained the funds of the voluntary hospitals, funds voluntarily and generously subscribed by millions of people, we assumed from what he said at the time, that they would be used by him solely for the benefit of the hospitals. If there is the slightest risk, and I wish to emphasise that, of their depreciation in the manner suggested by my hon. Friend the Member for Sutton Coldfield this House has a serious duty to perform. Bearing in mind what has been pointed out, I suggest that it would be far better if these funds were kept in a separate fund, where they would be entirely free from use by the Chancellor of the Exchequer, who might feel tempted at any particular time to bolster up his financial policy. This is only a possible risk, and hon. Members opposite might be prepared to concede that Chancellors of the Exchequer vary, as we think they do. The House having been put upon inquiry in this way by my hon. Friend, I sincerely hope that it will not neglect its duty.

10.55 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

This statutory instrument does a very simple thing. Under Section 7 of the 1946 Act, it is laid down that voluntary non-teaching hospitals shall, on the appointed day, that is 5th July last, transfer to the Minister of Health the funds at their disposal. These funds are a heterogeneous bunch of securities. Some of them are Government securities of one kind or another, but many of them are industrial shares and stocks, both British and foreign, in a variety of concerns. What has happened and is happening is that these securities are in process of being transferred to the Minister. It is his duty to put them into an endowment fund. At the moment, the amount he has received is £17¾ million, and there is, of course, still a good deal more to come, although how much I should not at this moment like to say.

Sir Hugh Lucas-Tooth (Hendon, South)

Is that figure gross or net?

Mr. Glenvil Hall

I cannot go into that. The hon. Member for Huntingdon (Mr. Renton) wanted to know a variety of things, but I think Mr. Speaker would rule me out of Order if I attempted to deal with them.

Mr. Renton

Surely the Financial Secretary would not be putting himself out of Order if he stated whether the amount he has mentioned is gross or net?

Mr. Glenvil Hall

Under the Act the securities have to be paid over to the Minister free from any lien upon them, and in that sense it is a net amount. The procedure which is being followed is that directions have been issued to the registrars of the companies in which these securities are held, and they have been instructed to transfer them into the name of the Minister of Health. The stock or share certificates will then be sent to the Bank of England to be held on behalf of the Minister, and they will be placed in this Endowment Fund. At the same time, it has been agreed that the National Debt Office shall be informed of what has been transferred into the name of the Minister and held at the Bank of England. So far as authorised investments are concerned, that is to say Government stocks or stocks guaranteed by the Government, those will be left with the Bank of England, and, as far as we can visualise, may not be touched for a considerable time. They will lie there in the Endowment Fund, interest will accrue upon them, and they will only be used in so far as the Act provides under Section 7 (5, a). Under the powers conferred on the Minister of Health by the Act where a specific hospital wants money for a capital purpose that money can be provided from this Fund.

The other investments, some of them foreign, some British, in all sorts of securities, will however gradually be transferred into Government stocks. That will not be done immediately. It will be done slowly as circumstances make that desirable, but they will eventually—it will take I imagine many years to do it—be transferred into authorised securities. That work will be the work of the National Debt Commissioners. Once the original transfers coming into this Fund have taken place there will be no further capital accretions to it at all. It will be an Endowment Fund held by the Minister of Health for certain purposes. The securities will, as I say, be held in the name of the Minister of Health and not by the Treasury.

Under the Act it is possible for the Treasury to give directions when regulations are made, but in this case as the hon. Baronet noticed and. pointed out, the Minister of Health himself is making these regulations, although, of course, the Treasury do fully approve of what has been done. The Treasury deliberately refrained from giving directions as empowered, because it was felt that, as this was an endowments fund the matter should be left to the Minister himself. The hon. Baronet asked me why under certain of the regulations of this order the National Debt Commissioners appeared to act and under other regulations of the order the Comptroller General or the Assistant Comptroller General were empowered to act. The reason is that when it comes to transferring stocks it has been thought quite proper that the officials of the National Debt Office should sign the transfers and that the Commissioners themselves should not have that work to do. In taking that course we have only followed precedent. For over a century the Comptroller General and his Assistant have signed transfers and it seems to us that there is no good reason now why that practice should be altered and the National Debt Commissioners themselves, busy men that they are, should have that routine work to do.

May I, before I sit down, say one thing about the fears which the hon. Baronet has expressed once more tonight that this money will in some way be used for a sinister purpose by this Government while it is in Office. In parenthesis I may my that he does pay us a very great compliment, for it would appear that he never expects a Government of Tory complexion ever to be in Office again. Otherwise, if he felt his own party would be where I am now standing in two years' time, he would not be worrying so much about changing what has been the practice all down the years in this matter. Nevertheless, whether he likes it or not, what this Government is doing is taking the commonsense course, and one it means to continue. So far as the Unemployment Fund is concerned, the Government have nothing to apologise for and —as I have already stated—did not use the Unemployment Fund to bolster up the cheap money policy instituted by my right hon. Friend, the Chancellor of the Duchy of Lancaster.

Sir J. Mellor

Will the right hon. Gentleman agree that no money was lost?

Mr. Glenvil Hall

As the hon. Baronet has once more made that charge, might I give him the facts? They are that before the National Insurance Act was passed the relative funds were divided. There was the National Health Insurance Fund and the Unemployment Fund, and the calls upon the one were not as great as, unfortunately—under Tory Governments—they were upon the other. The Unemployment Fund had to be kept liquid because unemployment was great, and sometimes reached colossal figures. For that reason, therefore, the Unemployment Fund had to be kept fairly liquid. When the Act of 1946 was passed, it was part of the new set-up that those funds should be amalgamated, I did not know this point was to be raised, but I think I am correct in saying that as we had at least £100 million in fairly liquid form it was felt on both sides of the House—by this Government and its predecessor—that was sufficient for all normal eventualities that could be foreseen in the immediate years ahead.

The caretaker Government, which preceded the present Government, therefore, took the view—and we after them thought it the right one—that some of the money coming into the Fund should be put into longer-dated securities for the simple reason that these gave a better return. A sum of £55 million as the hon. Baronet has said—and I think more now, has gone into longer-dated securities for that reason, and no other. There is a higher yield on the money.

That was the sole reason why some of the Fund was put into longer-dated securities than had previously been the practice. As a result, the National Debt Commissioners are getting a much better yield on a fair proportion of the money than they would have got from shorter-dated securities.

Sir J. Mellor

Is it not a fact that the former Chancellor of the Exchequer put money into undated securities?

Mr. Glenvil Hall

Undated and longdated are interchangeable terms. [Interruption.] I have nothing to hide. We have had Debates of this kind before, and on both sides of the House we have used the terms "Daltons," "long-dated" and "undated" as interchangeable. The hon. Baronet knows what I mean when I use the phrase "long-dated securities"; it means what are colloquially known as "Daltons," repayable at a date some distance ahead. I might add that the money which accrues to the National Debt Commissioners under the Act is about £400,000 at a time. It is quite impossible, particularly as the National Debt Commissioners are charged under the Act with the duty of investing it as soon as may be after it is received, for them to bolster up the gilt-edged market or to rig or alter the rates of interest, when they have at their disposal sums so small. Therefore, once more— and I hope for the last time—I have to tell the hon. Baronet that he is quite wrong, that the charge he makes is completely false, and I hope that now we shall have heard the last of this charge

11.11 p.m.

Mr. Assheton (City of London)

Speaking from this side of the House, I am glad that the hon. Baronet has raised this matter. I do not propose to attack the National Debt Commissioners. The Comptroller General and the Assistant Comptroller General are both men of the highest possible character, with whom I had the pleasure and honour of working when I was at the Treasury during the war. But I do wish to say a word about the wisdom of this order. I should like to stress to the House that this is entirely a nonparty matter, and that there should be no party heat engendered at all. Mr. Speaker is one of the National Debt Commissioners, and I should like to save him and the other Commissioners from the embarrassment of being put in a position which might be rather difficult for them.

There is a considerable sum of money here—at present £17,000,000, and likely to be rather more—which has to be invested in the interest of the hospitals. In Section 7 of the National Health Service Act it is laid down that all endowments of a voluntary hospital shall be transferred on a certain date to the Minister, and that the Minister shall establish a fund, to be called the Hospital Endowment Fund, to which he shall transfer all such endowments. The next stage is that regulations shall provide for the control and management of the Hospital Endowment Fund by the Minister or any person authorised to act on his behalf.

We then come to Section 56, which states that any money forming part of the Hospital Endowment Fund may from time to time be paid over to the National Debt Commissioners and by them invested in any securities which are for the time being authorised by Parliament as investments for Savings Bank funds. From that I deduce, and I do not think that the Parliamentary Secretary will challenge it, that the Minister of Health is free to decide what action he shall take, and he has decided to hand this money to the National Debt Commissioners. All I want to suggest now is that he should reconsider this proposal.

Mr. J. Edwards

I think it may save some argument if I remind the right hon. Gentleman that the words he referred to in Section 7 were put into the Bill in another place, with the explicit explanation at the time that the point of putting them in was in order that we might be able to use the National Debt Commissioners, and that no one, in the other place or here, took any exception to it. There was a little anxiety expressed in another place that we might use someone other than the National Debt Commissioners. The right hon. Gentleman should bear in mind that the words were put there for the very purpose of enabling us to use the Commissioners, and that that was put there at the time without any dissent from any party.

Mr. Assheton

I entirely accept what the hon. Gentleman has said, that he is quite entitled to hand these moneys over to the National Debt Commissioners. He is entitled to do so, and that is evidently the intention, but he is not compelled to do so. I am suggesting that there are some considerations the House should bear in mind before the Minister decides to take that particular course of action.

Mr. Edwards

Is the right hon. Gentleman now suggesting that the understanding which was clearly given and the grounds on which this Amendment was sought in another place are now to be thrown overboard and the word of the Minister given in another place is to have no effect? When a responsible Minister says something, surely we expect that promise to be kept.

Mr. Assheton

I am afraid I do not know what the Minister said in another place. All I am able to quote here is the Act. The Act undoubtedly gives the Minister power to hand money over to the National Debt Commissioners, and I am seeking to make one or two points on why I think it might not be a desirable course to follow. The House will appreciate that in lending and borrowing money the position of the lender and that of the borrower are quite different things. The interests of the lender and the interests of the borrower are by no means identical. There are many occasions when hon. Members may have found that to be the case. The Parliamentary Secretary to the Ministry of Health was the general secretary of a great trade union. I do not know whether he was always prepared to take the advice of the Treasury about how the funds of his union ought to be invested, but I an conceive that there were occasions when he was not prepared to take their advice and took a different view.

This great Fund has been set aside for the benefit of the hospitals and I am suggesting that there may be occasions in the future when the interests of the hospitals and the interests of the Treasury and the National Debt Commissioners may not be identical, and I think it would be an embarrassment for the National Debt Commissioners, of which Mr. Speaker is one, to have the handling of this particular Fund.

Mr. Glenvil Hall

Why did not the right hon. Gentleman raise that when the Act was going through and members of his own party wanted this provision put in?

Mr. Assheton

I honestly cannot answer that, because I was not present when this was discussed. Had I been present, I should probably have raised the point. The right hon. Gentleman is aware that I have raised it on previous occasions. When I first went to the Ministry of Labour I was very anxious about this position, of having the whole of the Unemployment Fund under the control of the Treasury. I did not think it a good thing, and I do not think it a good thing now. It is not my purpose to go into the whole question, which the right hon. Gentleman has been arguing with the hon. Baronet, but it is certainly the case that a large investment was made by the National Debt Commissioners on behalf of the Unemployment Fund, which has resulted in a temporary depreciation of a very heavy amount.

The right hon. Gentleman talked about long-term securities being the same as securities without a date. I do not know whether he has really grasped the implications of this. The point about long-term securities is this. Whatever price is paid for them, one day they will be repaid at par. If you buy at 100 and they go down to 90, and you hold them until they mature, they will be redeemed at par. You will have lost nothing in the long run. This particular investment in Treasury stock, redeemable in 1975 and after, commonly called "Dalton" Stock, is not a long-term security. It is an undated security. You may invest in them at 100, as many people have done, and then they fall to 80. But there is no certainty that they will ever again rise to 100. Long-dated securities, when redeemed, would rise to 100, but this stock is to be redeemed in 1975 or after at the option of the Treasury and, therefore, it is not a long-dated stock. There is no certainty it will rise to par.

Dr. Morgan (Rochdale)

But it may.

Mr. Assheton

Certainly it may, but that is a speculation.

Mr. Glenvil Hall

And one day be redeemed like local loans.

Mr. Assheton

There is no certainty that this stock will ever be redeemed, because the specific terms do not provide for redemption on any date. Consols 2½ per cent. are in exactly the same position. They have been redeemable at any time since 1912, but they have not been redeemed yet and I very greatly doubt whether they ever will be redeemed, unless some hon. Member suggests that money is likely to fall to 2 per cent. Therefore, the criticism which the hon. Baronet has been making all these weeks and months is one of which I suggest that the Parliamentary Secretary to the Ministry of Health should take account. It may not be a matter which he has gone into closely or considered. The point is that some other funds have been invested in security which has fallen heavily. There was a fall of 20 per cent.—a fifth of the capital value gone. That was a very substantial fall. It was not a fall about which to laugh. There is no certainty whatever, and some people think little likelihood, that that fall will ever be recovered. Therefore there may well be a permanent loss to those funds.

We are trying to safeguard the Parliamentary Secretary to the Treasury and the Minister of Health, from making a similar mistake regarding the Hospital Endowment Fund. We do not want to see this Fund dissipated. We do not want to see it depreciate in value. I am suggesting that the interest of the National Debt Commissioners is always liable to be, and inclined to be, the interest of the Treasury. The Treasury is the borrower. Do not forget that. The Hospital Endowment Fund or the Un-

employment Fund, whichever it may be, is the lender. Their interests are different. Their interests always will be different. The interests of borrowers and lenders, naturally, are different. Of course, the Financial Secretary comes here to put the interest of the Treasury. I am trying to detach the Parliamentary Secretary to the Ministry of Health from the Treasury on this matter. I am asking the Ministry of Health to look at this again to try to safeguard their interests. The advice from the Treasury may not suit them in the long run. They should seek a little independent advice and see what is really good for them. Let the Parliamentary Secretary remember what he would have done when he was general secretary to a trade union. Let him get advice from someone other than the Treasury. If he is satisfied that the advice he gets from other people is the same as the advice he gets from the Treasury, that will be another matter. We on this side of the House are not satisfied with this order, and I shall advise my hon. Friends to vote against it.

Question put, That an humble Address be presented to His Majesty praying that the Regulations, dated 30th June, 1948, entitled the National Health Service (Control and Management of Hospital Endowment Fund) Regulations, 1948 (S.I., 1948, No. 1489), a copy of which was presented on 1st July in the last Session of Parliament, be annulled.

The House divided: Ayes, 40; Noes, 183.

Division No. 8.]	AYES	[11.25 p.m.
Agnew, Cmdr. P. G	Gage, C.	Ropner, Col. L
Asshelan, Rt. Hon. R	Gates, Maj. E. E	Spence, H. R.
Bossom, A. C.	Head, Brig. A. H	Stoddart-Scott, Col. M
Boyd-Carpenter, J. A.	Hollis, M. C.	Strauss, Henry (English Universities)
Bromley-Davenport, Lt.-Col. W.	Hutchison, Lt.-Cm. Clark (E'b'rgh W.)	Studholme, H. G.
Buchan-Hepburn, P. G. T.	Linstead, H. N.	Taylor, C. S. (Eastbourne)
Challen, C.	Lucas-Tooth, Sir H.	Teeling, William
Crosthwaite-Eyre, Cot O. E	McCorquodale, Rt. Hon. M. S	Thomas, J. P. L. (Hereford)
Drayson, G B.	McFarlane, C. S.	Ward, Hon. G. R.
Dugdale, Maj. Sir T. (Richmond)	Mackeson, Brig. H. R.	Wheatley, Colonel M. J. (Dorset, E.)
Duthie, W. S.	Manningham-Buller, R. E.	Williams, Gerald (Tonbridge)
Elliot, Lieut.-Col, Rt. Hon. Walter	Morrison, Rt. Hn. W. S (Cirencester)	Willoughby de Eresby, Lord
Foster, J. G. (Northwich)	Mullan, Lt. C. H.
Fraser, Sir I. (Lansdale)	Nicholson, G.	TELLERS FOR THE AYES;
		Sir John Mellor and Mr. Renton.
NOES
Adams, W. T. (Hammersmith, South)	Bing, G. H. C	Brown, T. J. (Ince)
Allen, A. C. (Bosworth)	Binns, J	Burke, W. A.
Allen, Scholefield (Crewe)	Blenkinsop, A.	Butler, H. W. (Hackney, S.)
Awbery, S. S.	Blyton, W. R.	Champion, A. J.
Baird, J.	Boardman, H.	Cobb, F. A.
Balfour, A	Bowden, Fig, Offr. H. W.	Collindridge, F.
Barton, C.	Bowles, F. G. (Nuneaton)	Collins, V. J
Bechervaise, A. E.	Braddock, Mrs. E. M. (L'pl. Exch'ge)	Colman, Miss G. M
Benson, G.	Braddock, T. (Mitcham)	Cook, T. F.
Berry, H.	Brook, D. (Halifax)	Corlett, Dr. J.
Dagger, G.	Jones, Elwyn (Plaistow)	Reid, T. (Swindon)
Dalton, Rt. Hon. H.	Jones, P. Asterley (Hitchin)	Richards, R.
Davies, Edward (Burslem)	Keenan, W.	Robens, A
Davies, Harold (Leek)	Kenyon, C.	Ross, William (Kilmarnock)
Davies, Haydn (St. Pancras, S.W.)	Kinghorn, Sqn.-Ldr. E	Royle, C
Davies, S. O (Merthyr)	Kinley, J	Shackleton, E. A A
Deer, G.	Lavers, S	Sharp, Granville
Delargy, H. J.	Lee, F. (Hulme)	Shawcross, C. N. (Widnes)
Driberg, T. E. N.	Lewis, A. W. J. (Upton)	Silverman, J. (Erdington)
Ede, Rt. Hon. J. C.	Lewis, T. (Southampton)	Skeffington, A. M.
Edwards, John (Blackburn)	Lindgren, G. S.	Skeffington-Lodge, T. C
Edwards, W. J. (Whitechapel)	Logan, D. G.	Smith, S. H. (Hull, S.W.)
Evans, Albert (Islington, W.)	Lyne, A. W.	Snow, J. W.
Evans, John (Ogmore)	Mack, J. D.	Soskice, Rt. Hon. Sir Frank
Evans, S. N (Wednesbury)	McKay, J. (Wallsend)	Stewart, Michael (Fulham, E.)
Ewart, R.	McKinlay, A. S.	Stubbs, A. E.
Fairhurst, F	McLeavy, F.	Swingler, S.
Farthing, W. J	Mallalieu, J. P. W. (Huddersfield)	Sylvester, G. O
Fernyhough, E	Mann, Mrs. J.	Symonds, A. L.
Field, Capt. W. J.	Manning, Mrs. L. (Epping)	Taylor, R. J. (Morpeth)
Freeman, J. (Watford)	Mellish, R. J.	Thomas, D. E. (Aberdare)
Freeman, Peter (Newport)	Middleton, Mrs. L	Thomas, I. O. (Wrekin)
Ganley, Mrs. C. S	Mitchison, G. R	Thorneycroft, Harry (Clayton)
Gibbins, J	Monslow, W	Tiffany, S.
Gilzean, A.	Moody, A. S.	Titterington, M. F
Glanville, J. E. (Consett)	Morgan, Dr. H. B	Ungoed-Thomas, L
Gooch, E. G.	Morley, R.	Usborne, Henry
Gordon-Walker, P. C.	Morris, P. (Swansea, W.)	Wadsworth, G.
Greenwood, A. W. J. (Heywood)	Mort, D. L.	Wallace, G. D. (Chislehurst)
Grey, C.F.	Nally, W.	Wallace, H. W (Walthamstow, E.)
Griffiths, D (Rother Valley)	Neal, H. (Claycross)	Walkins, T. E.
Guy, W. H.	Nichol, Mrs. M. E. (Bradford, N.)	Watson, W. M
Hall, Rt. Hon. Glenvil	Nicholls, H. R. (Stratford)	Webb, M. (Bradford, C.)
Hamilton, Lieut.-Col. R	Noel-Baker, Rt Hon. P. J. (Derby)	Weitzman, D.
Hannan, W. (Maryhill)	Oliver, G. H.	Wells, P. L. (Faversham)
Hardy, E. A.	Orbach, M.	Wheatley, Rt. Hn. John (Edinb'gh, E.)
Henderson, Joseph (Ardwick)	Paling, Will T. (Dewsbury)	White, C. F. (Derbyshire, W.)
Herbison, Miss M.	Palmer, A. M. F	White, H. (Derbyshire, N E.)
Hewitson, Capt M	Pargiter, G. A	Whiteley, Rt. Hon. W
Hobson, C. R	Parkin, B. T.	Wilcock, Group-Capt C A. B
Holman, P.	Paton, Mrs. F. (Rushcliffle)	Wilkins, W. A.
Holmes, H. E (Hemsworth)	Paton, J. (Norwich)	Willey, O. G. (Cleveland)
Hoy, J.	Pearson, A	Williams, J. L (Kelvingrove)
Hubbard, T.	Peart, T. F.	Williams, R. W (Wigan)
Hudson, J. H. (Ealing, W.)	Porter, E. (Warrington)	Williams, W R. (Heston)
Hughes, Hector (Aberdeen, N.)	Porter, G. (Leeds)	Wills, Mrs. E. A
Hutchinson, H. L. (Rusholme)	Price, M. Philips	Wise, Major F. J
Hynd, J. B. (Attercliffe)	Pryde, D. J.	Woodburn, Rt. Hon A
Janner, B.	Pursey, Comdr. H	Yates, V. F
Jeger, G. (Winchester)	Randall, H. E.
Jenkins, R. H.	Ranger, J	TELLERS FOR THE NOES;
Jones, D. T. (Hartlepool)	Rankin, J.	Mr. Simmons and
		Mr. Richard Adams.

Question put, and agreed to.