HC Deb 16 February 1971 vol 811 cc1596-7
19. Mr. Tilney

asked the Chancellor of the Exchequer what action is taken by Her Majesty's Government to alert investors in the obligations of public boards and other securities in the narrow range for trustee investments that any particular public authority is making losses not guaranteed by Her Majesty's Government; and what action is taken by Her Majesty's Government, when such public authority partially or wholly defaults, as to announcing the eligibility or not for buying or retaining its obligations outside or inside the narrow range by trustees limited by the Trustee Act.

Mr. Maurice Macmillan

A trustee dependent on the general law for his trust powers is responsible for managing his trust's investments in accordance with the relevant Acts. It would be wrong for the Government to assume the responsibilities which my hon. Friend suggests.

Mr. Tilney

Is my hon. Friend aware that the partial default by the Mersey Docks and Harbour Board is the first by a public board, at least in this century? Despite there being four Government members on the board, no bond-holder received the accounts and was, therefore, aware that the board was getting into financial difficulties. May this not be happening with other public boards?

Mr. Macmillan

The status of a public trustee company or the fact that a security has trustee status has never implied any kind of Government guarantee or, indeed, that it is a perfectly safe investment. The rules are exactly the same. This particular type of investment is open to trustees in the narrower range fund with advice. It is up to the advisers of investors to guide them in their investments.

Mr. Barnett

In view of the serious effect on local government investment generally and on other bonds, may I ask whether the hon. Gentleman will reconsider his decision to refuse to intervene and to change the callous decision to allow thousands of small investors to carry this burden?

Mr. Macmillan

What the hon. Gentleman suggests is that the Government should guarantee every form of public investment, including local authority investment. This has never been the position of any Government. This Government do not propose to take it up.

The future arrangements for the Mersey Docks and Harbour Board are governed by the Private Bill brought forward by the Board.