SAVINGS BANKS BILL.—(No. 88.) COMMITTEE. (Hansard, 5 May 1891)

§ LORD NORTON
My Lords, I cannot help thinking that this clause is worded in a most extraordinary way, which perhaps the noble Lord who is in charge of the Bill will explain. It begins by saying that trustees of savings banks May not be designated or described in any manner which imports that the Government is responsible or liable to depositors for money placed in the safe keeping of the Bank. Who is to say what language imports Government liability? It is, I think, a very strange mode of enacting. And I should like also to ask whether a phrase of this sort will relieve the Government practically of any liability which rests upon it now? It seems to imply that the Government may be in some way implicated in the shape of liability, and that this is the 126 only mode of rescuing the Government from it. If that is what it means, it seems to me to be a very impotent mode of rescuing the Government. Then there is another point which I would ask the noble Lord to explain in the second subsection of this first clause. It begins by saying—"If default is made in compliance with the requirements of this section." Does that mean that compliance with this Act causes default? That is what it implies. I suppose it means that if default is made by noncompliance with the section. It seems a very strange thing that an Act should be so framed that default shall take place "in compliance with its requirements."

THE SECRETARY TO THE BOARD OF TRADE (Lord BALFOUR OF BURLEIGH)
In reply to the noble Lord, I will take his last point first upon the words, "If default is made in compliance with the terms of this section." That, of course, refers to non-compliance with the terms of the section. As regards the other point, there is no liability on the part of the Government to make good deposits in Savings Banks when those deposits are lost through some mismanagement on the part of Trustees. But sometimes titles have been taken in the past which perhaps might not imply to educated persons that there was a liability on the part of the Government, but still have been used to mislead and delude the class of people who most use these Savings Banks into the belief that the Government is liable; and the desire is to make it clear in the future that these savings banks shall be so described as that the description cannot lead to that misunderstanding. With regard to the section which will enforce compliance with the rules, our chief object of this Bill is to enable the National Debt Commissioners (acting on the representation of a Committee which will be appointed under rules to be framed in accordance with the provisions of this Act), to enforce the provisions of the Act of 1863, which I understand they have never been able to do in the past.

§ LORD NORTON
I suppose this Bill will go before the Standing Committee. If so, I shall venture to move an alteration according to the explanation which has 127 now been given, namely, that the Government shall be distinctly stated in the clause to be under no liability. That will, I think, be a better mode of relieving the Government from any false position they may be placed in, than by saying that the bank "shall not be designated in such a manner as to import liability" of the Government. I would also suggest that instead of saying, "If default is made in compliance with" the Act, the section should provide, if default is made by "non-compliance with" its terms.

LORD BALFOUR OF BURLEIGH
As a matter of course, this Bill will go before the Standing Committee, and as I said, in moving the Second Reading of the Bill, I propose that the Bill shall not go to Standing Committee until after Whitsuntide. There are some verbal Amendments to be made in the clauses of the Bill, but I have purposely avoided putting them on Paper for this stage in order to leave them for Standing Committee. One Amendment which stands in my name for to-day deals, however, with a matter of considerable importance which it was thought right should be submitted to the consideration of the House. With regard to the proposed Amendments of the noble Lord who has just spoken, of course, if he gives notice for the insertion of words in substitution for those now in the Bill, I beg to assure him they shall receive due consideration.

LORD STANLEY OF ALDERLEY
My Lords, the noble Lord in charge of the Bill is no doubt aware that two or three years ago an attempt was made in the other House to get the maximum amount of deposits in one year increased above £30. I do not think I need say anything about the advantage of increasing this amount in the interests of thrift. The reason I have put down £80 in this Amendment is simply because that is the sum fixed in France and Belgium, and cœteris paribus there ought I think to be a higher amount fixed in this country. It is in the interests of thrift that people, having small windfalls and legacies, should be 128 able to put them into savings banks instead of spending them in drink, which is, I am afraid, what very generally happens. The chief difficulty which has been made is on the ground of the objections which might be raised by the small country banks. But I would point out that this Bill will extinguish a good many of the Trustee savings banks, and so will take away some of the competitors with those small country banks. Then, again, I do not think it can be said that the same class of persons use these Post Office Savings Banks and the country banks. The country banks are used generally by tradesmen and farmers and others who desire to keep current accounts; but these savings banks are for those who have no wish to keep current accounts, but simply wish to put their money by to increase. Therefore, I hope the noble Lord will be able to state that the Government will consider the advisability of increasing the maximum amount which may now be placed in these savings banks.

LORD BALFOUR OF BURLEIGH
My Lords, I am sorry I cannot accept this Amendment, and in a word or two I will state the reason why. Your Lordships are aware that there are two restrictions upon the deposits in these savings banks and in the Post Office Savings Banks. One restriction is upon the amount which may be deposited in the name of one individual. The total sum which may be standing in his name at the present time is, exclusive of interest, £150, and this may accumulate by interest up to £200. This Bill proposes to sweep away the difference between money deposited as capital, and money accumulated as interest, and to allow any one to deposit sums up to the total amount of £200. The other restriction is that no one may deposit more than £30 in the course of any one year. That is the restriction which the Amendment of the noble Lord is intended to sweep away, and he proposes at once to raise the sum which may be deposited in the course of any one year from £30 to £80, 129 that is very nearly trebling it. He pleads for this in the interest of thrift, as I understand it. If he could really have made out that this proposed alteration was called for in the interest of thrift, I am sure it would appeal not only to Her Majesty's Government, but to this House with very great force; but I venture to say that the class of persons who, as depositors, usually make use of these savings banks, and in whose interest the Government ought to act in such a matter, would probably very seldom indeed have the power of laying by more than £30 in one year. Now the noble Lord who moves the Amendment seems to have some idea of that, because he specially pleads for this proposal in the interest of those who have received what he terms windfalls or legacies. But those who do receive such legacies or windfalls may, and I venture to think ought rather to, take advantage of other provisions made for them, other conditions under which they may deposit and invest money. As your Lordships are aware, any one may now purchase Government Stock of the country in sums of £10 and upwards. If any one has a legacy which he wishes to lay by to provide for a time of distress, he cannot do better than purchase Consols, and he can do that either through these Trustee savings banks or the Post Office Savings Banks up to the amount of £100 in any one year. That is a much more efficient provision for his benefit, because he will get a higher rate of interest than he would if he simply deposited the money in the savings bank. Under these circumstances, and because, as I have already stated, I do not think the class of persons for whom these savings banks are intended would be likely to put by out of their earnings more than £30 in any one year, I cannot accept the noble Lord's Amendment. The noble Lord says that some years ago a proposal of this kind was made in Parliament. I may remind him that in the present Session a proposal was made in another place to raise the limit, not to £80 but to £60, and it was rejected by a large majority. Your Lordships will not, I imagine, in all the circumstances, think it desirable to alter the limit as it stands in the Bill, and I am quite unable to accept the Amendment.

LORD STANLEY OF ALDERLEY
I withdraw the Amendment, as the statement of the noble Lord is so satisfactory with regard to the investments which can be made in Consols.

LORD BALFOUR OF BURLEIGH
There is an Amendment standing in my name which I move in pursuance of a pledge given in another place, and which pledge I repeated on the Second Reading of the Bill. It is intended to meet the case of depositors in savings banks who have had from some sudden emergency to draw out a considerable sum, and then find they do not require it or the whole of it. If this Amendment is not inserted the present law will remain that they cannot place in the savings bank more than £30 in any one year. The object of this Amendment is to allow money which has been drawn out in that way to meet an emergency to be replaced without its being counted to make up the limit of £30. They can do it only once in a year, which I think will sufficiently safeguard the other banks, and will prevent what is not really intended the use of these savings banks and of ordinary Post Office Savings Banks for the purpose of keeping current accounts. I believe this Amendment will meet with the approval of a great number of people, and I may say that I have received communications from many persons who are interested in the subject to that effect. I hope therefore your Lordships will agree to it.