LIFE ANNUITIES ACTS REPEAL BILL. (Hansard, 22 April 1828)

Lord King
thought that no person, except the father or the dry-nurse of them, could object to the smothering of bills by which the public had lost so many millions of money. He had, therefore, no wish to object to the present bill, which seemed intended to correct the blunders of former political quacks. "Quam parvâ, sapientia regitur mundus!" was a well-known maxim, but the framers of those bills could not have been gifted even with that little wisdom; for more foolish bills had never passed through parliament. It seemed scarcely credible that any person belonging to the Treasury should have put into operation two bills which actually counteracted each other. At the end of the last war there remained a permanent debt, and a large burthen of life annuities to the army and navy. A change was effected in that disposition of the debt by a good many nostrums of quacks. By the dead bill, one project was to relieve ourselves from paying the present-life annuities, by distributing it over a larger surface and making smaller annual payments. Another pro- 1624 ject was also put in execution. We had a large permanent sum to pay; and, in order to relieve ourselves we created life annuities, doing the very reverse in this instance of what had been done by the other bill; for we got rid of life annuities by converting them into a permanent debt; and we converted a permanent debt into life annuities. Two more absurd and counteracting schemes he had never known. What private gentleman, supposing him to have granted mortgages and life annuities on his property, would grant more life annuities to relieve himself from the mortgages, and grant mortgages to relieve himself from the life annuities? In all the mismanagements and blunders of politicians, there had never been any thing equal to that; nor had that absurd system been persevered in without the parties being made aware of it: for he found in a letter from Mr. Finlayson to J. C. Herries, Esq., the following passage:—"It is now a period of eight years, since I had the honour of pointing out to lord Bexley, the then chancellor of the Exchequer, the loss, as now demonstrated, which would be incurred by the public." Notwithstanding that letter, nothing had been done. Why was not a bill brought in upon the very day when the loss was pointed out? At the time when these bills were enacted, there existed the Law Insurance Company, and it was proposed to them to grant life annuities. The company said, however, that they could not do so without being ruined. They stated that, if they offered annuities on worse terms than the government, they would get no custom; and if they offered them on as good terms as the government, they must be ruined. Mr. Finlayson had made another remark. Alluding to the manner in which accounts were drawn up to be presented to parliament, he stated that, from some cause or other, three columns had been interpolated, by which a balance was presented, which was altogether fallacious. Whatever might be said of Mr. Finlayson's accounts as a whole, one part of them was very clear. It appeared that upon the annuities granted in the first year of the operation of the act, the public had been losers to the amount of 10,750l. We were now he hoped, relieved from all political quacks and mountebanks, and had got into a clearer and more intelligible line of politics. The public had undergone copious evacuations. First of all Van Butchell had been 1625 called in, who prescribed strong purgations; and then Dr. Eady was sent for, who perfectly agreed with what Van Butchell had clone, and said that, if he had been called first, he would have done the same thing. Five acts were then enacted. First there was the 48th of George 3rd. "Purgare," says the doctor. Then came the 49th of George 3rd. "Iterum purgare." Then the 52nd of George 3rd, for the purpose of relieving the patient, "Repurgare," writes the doctor. Then the 56th of George 3rd, "Clysterium donare:" and afterwards the 57th of George 3rd, "iterum clysterium donare." It was very fortunate after all this, that out of respect to the retired practitioner, nothing more was said than that it was expedient to repeal those acts.

§ Lord Bexley
hoped their lordships would excuse him if he offered a few observations in consequence of what had fallen from the noble baron, who, if he had taken the trouble to look into the accounts, might have spared himself the trouble of making those remarks. Whatever might be the merits or demerits of that system which it was the object of the present bill to abolish, it was not on him that the praise or blame should lie; the only fault that could be imputed to him or to his successors was, that they did not proceed to alter the law. It was in Mr. Perceval's time that the life annuities system had been established; and so far from its being a favorite with him, he had cautioned Mr. Perceval of the probability of its not answering the purpose intended. However, Mr. Perceval was persuaded of the advantages of the plan; and, after consulting the best authorities upon their assurances, he submitted it to parliament. He thought, if the noble baron had read Mr. Finlayson's letter with any attention, he would have spared many of his observations. Mr. Finlayson, so far from imputing blame to him or his successors, stated that they had followed the only course which lay open to them; which was, that when he had pointed out, in 1819, that the public was a loser by the transaction, they directed him to make himself master of the subject, and gave every facility to his investigation. That gentleman, then, was far from attributing any fault to him: indeed, he would have been to blame if he had acted upon opinions not digested or matured five years after he had left office. His successors 1626 would likewise have been to blame if they had acted upon those opinions before any report had been made by Mr. Finlayson respecting the result of his investigation. So late as last January no report had been made on the subject, and he did not know whether at the present time any report had been made. With respect to what Mr. Finlayson stated about a loss of 8,000l. per week, in consequence of these acts, all he could say was, that that gentleman never mentioned any thing of the kind to him. He stated generally, that he believed there was a loss; but anything of that extravagant kind he never stated, and in consequence of his statement, he was directed to proceed in the investigation.—His lordship stated, that he thought it desirable that the permanent debt of the country should become less, nor could he see, in the means adopted to effect that object, the inconsistency which the noble baron supposed; namely, by exchanging an actual and permanent debt for one which, in the course of time, would extinguish itself. He intended, on moving for some returns, to take the opportunity of stating the reason for the enactment of those acts.

Lord Goderich
wished to say a few words on the course pursued by government, with respect to the question of life annuities. It might be possible, he thought, to find quacks in other posts besides that of a minister. The noble baron seemed to think their lordships' House as a repository for his wit. He would not, however, follow his example, but would leave the noble lord to favour their lordships with his critical lectures. With respect to the present question, all that was incumbent on him was, to explain how it happened that no step was taken by him in consequence of the representations of Mr. Finlayson. With respect to the letter to which the noble lord referred, it would be seen by the date, that that letter was addressed to the Treasury at a time when he had no connexion there; namely, on the 30th of April, 1827. He never saw nor heard of that letter, until the commencement of the present year, after parliament had met. Some time after that letter was written, he had become chancellor of the Exchequer, and Mr. Finlayson called upon him and produced two handsomely bound books, containing some of the most complicated and intricate calculations he had ever been 1627 called upon to investigate. Of course he thought it his duty to examine the subject as far as he could. Mr. Finlayson stated, that the two books were the commencement of a series of inquiries which he was engaged in, by the direction of lord Bexley, for the purpose of bringing to the test the idea which had occurred to him, that the duration of human life, especially of female life, was much longer than had generally been assumed. If Mr. Finlayson's idea should turn out to be true, then undoubtedly the annuities given under Mr. Perceval's act of 1808, involved a loss to the public; because they were founded on the supposition, that the duration of human life was not more than that laid down by Dr. Price. The subject was one of great importance. It certainly was quite new to him to be told that the tables of Dr. Price were so erroneous. Every person differed more or less as to their accuracy; but they were the foundation upon which all annuities were granted. Though it might be true that the investigations of Mr. Malthus tended to throw doubt on the accuracy of those tables, yet, at the time he was speaking of, nothing had appeared to justify any man of common sense in assuming any new basis of calculation. Mr. Finlayson had very extensive schemes in his own mind, not only with respect to the alteration of those acts, but to every possible combination. He therefore thought it his duty to desire him to proceed in his inquiry, and accordingly employed him at the public expense. Knowing the intricacy of the subject, and knowing him to be a diligent and active man, he certainly considered that Mr. Finlayson was proceeding in his inquiry, as fast as the nature of the subject permitted him; He always said, that he would not proceed to submit a new plan to parliament until the whole subject was investigated; for, to come down to parliament, pretending to have made a great discovery, having only piece-meal information, was not a part of his medical practice, whatever quackery he might be in the habit of indulging. Mr. Finlayson's salary was 500l. per annum; and he thought it high time that the matter was brought to a termination.

The Earl of Lauderdale
said, that the 1628 object of the sinking fund was neither more nor less than to save posterity part of the burthens which would otherwise fall upon them; while the object of the dead weight was to serve the present generation. If those were not contradictory propositions, he knew not what contradiction was. He thought the noble lord opposite ought to be very cautious in receiving Mr. Finlayson's calculations. There was a sort of impetuosity and hurry in making this discovery which made him receive his future information with less readiness of conviction than he otherwise should have done. The present bill was founded on the supposition, that the public incurred an annual loss by the Annuities acts. He wished to know whether those who had brought the bill forward had considered what was the price of the funds, and how far that price was advantageous, even admitting their calculations to be correct. If they had made such a consideration, they, perhaps, would not have been so hasty in bringing forward an accusation against their predecessors in office. He thought the tables respecting the duration of life must be taken to be drawn up in favour of the offices which granted annuities.