HL Deb 20 March 1919 vol 33 cc870-6

LORD WITTENHAM rose to ask His Majesty's Government whether it has been decided to appoint a Commission or Committee of Inquiry into the present condition of the Department of the Public Trustee, arising out of the great additional volume of business thrown upon it during the war, and from other causes; and, if so, whether the terms of the reference and the powers of the Commissioners or Committee can be made public.

The noble Lord said: My Lords, in asking the Question which stands in my name I will not detain your Lordships for more than a few minutes. This Act dealing with the Public Trustee was passed into law in the first session of the Radical Government of 1906, and came into operation, I think, on January 1, 1908. Therefore it has been in active work for a period of rather more than eleven years. I very much doubt whether any of those interested in the promotion of that measure could ever have forecast the immense dimensions which it would attain in a comparatively short period of time. The superintendence of the Department which was created by the Act of 1906, has come under the benevolent eye of no fewer than, I think, five Lord Chancellors, Of course, their supervision is merely nominal, but they have the appointment not only of the Trustee, but, in conjunction with the Treasury and with the sanction of the Treasury, of all the officers connected with the Department.

Sir Charles Stewart, as he subsequently became, and Mr. Stewart, as he was when he was appointed Public Trustee, deeply as he had this matter at heart must, I think, have been astounded at the development of his Department. The reason probably for this development, up to the time of the war, was that the Department filled a want which was deeply and widely felt. As men get old and friends drop away they find it very difficult to find a trustee or executor to act. The Public Trustee never dies—his Department goes on—and therefore the difficulty of finding somebody to act in the winding up of an intricate estate was solved by the appointment of the Public Trustee. A man who confided his estate after death to that Department felt it was a public Department, and he had absolute confidence in its integrity. I was astonished to learn that, during the years this Act has been in force, from small beginnings the Department now has the control, as I was told on good authority, of something like £100,000,000, and of no fewer than 10,000 trusts.

That is an immense business, when you think what 10,000 trusts means, each one with its own history. An intricate trust need not be a trust involving large sums of money, but requiring precise knowledge on the part of the Department. I am inclined to think that the figure I have mentioned, of nearly £100,000,000, had been reached in 1914 at the beginning of the war. But now see what the war has done. The Government of the day has piled on the top of all the ordinary work of the Department, swollen as that was, as I have tried to show, the custody of enemy property, and, I think, the winding-up to a certain extent of enemy businesses. For that purpose I understand hundreds of clerks have had to be engaged, and owing to the exigencies of the war clerks probably who have no real business knowledge and certainly no knowledge of the history of the trusts which form the ordinary work of this Department. To put it in one sentence, chaos has resulted, because the Department has been asked to do the impossible.

If any man could have done it Sir Charles Stewart, an old friend of my own in days gone by, would have been able to manage it, but I am sorry to think that his health gave way, probably under the strain of work, and he resigned his office. I am blaming nobody, but I am blaming circumstances, though I am not sure that any one can blame circumstances, because in common with so many other Departments this Department has had to perform more than it possibly could do. I said hundreds of new clerks had been engaged, and I said they were not competent to do the specialised work of this Department. Even they, as soon as they have got into harness, have moved on, so I am told, to banks and solicitor's offices, having acquired a certain amount of technical knowledge and received offers of higher salaries, the Treasury, I am told, having only sanctioned a low rate of salaries to this new class of post-war clerks.

You cannot expect good service in these circumstances. Clerks come and clerks go and the Department muddles on. It has come to a point now where something has got to be done. Evidently the noble and learned Lord who sits upon the Woolsack shares my opinion to that extent, because, unless I am wrongly informed, the noble and learned Lord has decided to appoint either a Committee or a Commission to inquire into the whole state of the Department. Therefore, the Questions that I have put on the Paper ask, first of all, whether this Committee or Commission is going to be appointed, and, secondly, whether the noble and learned Lord can make public the terms of the scope within which the Committee or Commission will act. I should like to ask, further, whether it is wise any longer that what was intended to be a small Department should attain these tremendous dimensions.

The investment alone of these vast sums of money requires very expert attention indeed. As for the management of the property it is as large as the management of a large joint stock bank. I will not say it is as intricate, but in many ways it is quite as difficult. The result of the deadlock at which things have arrived is that beneficiaries of estates are, in very many cases, in arrear in the receipt of their annuities, allowances, and the annual sums to which they are entitled; letters are being left unanswered, and all sorts of difficulties and hardships are arising. I do not feel that I am entitled any longer, particularly at this hour, to amplify the condition of chaos into which the whole Department has fallen, but I would ask the noble and learned Lord on the Woolsack when he comes to answer me—which I understand he will do—if he can not only answer the Questions upon the Paper but also tell me whether he himself does not see some danger and difficulty in allowing the ordinary normal work of this Department to keep on being increased in the way that it has during the last eight or nine years—whether the time has not come in fact to cry "Halt!"

I know that the Act allows the Public Trustee to decline to take business, but the temptations are very great for any Department. It magnifies its own importance. The more business it has to transact the more important it is. Therefore it is very difficult to say "No." As I understand, there is no profit made out of the Department. The whole of the emoluments which accrue to the Department in the shape of fees go, so I understand, in the payment of the clerks and the general upkeep of the office and staff. But, as to the question of principle, is it not wise, at any rate, to let that be one of the terms of the inquiry by the Committee or the Commission—whether the time has not come to cry "Halt"? If it has not, then at once realise that this is a very great, a very important Department of the State which, ought to be dealt with on these lines.

LORD ASHTON OF HYDE

My Lords, before the Lord Chancellor replies may I say one word? I quite agree with my noble friend who has brought this matter forward—and I am very glad that he has brought it forward—that the liabilities in the hands of the Public Trustee now are enormous. I do not think he is in the least exaggerating when he says that they are over £100,000,000 at least. It is quite true that the investment of these enormous funds, which in itself is a vast undertaking, is in the hands of the Public Trustee, and for some time the Public Trustee alone was really responsible for the way in which these funds were invested. Of late years he has himself appointed a Committee of eminent city men who understand investment to advise him in this matter. Therefore, to that extent his position is much stronger than it was.

But in one respect, if there is to be a Committee, I hope there will be consideration, and it is this. The vast funds in the hands of the Public Trustee are, in my opinion, far too large to place in the practically uncontrolled hands of one man. It is too much. You may get the best man you like, but it is too much for the nation to have these vast fund; entirely in the hands of one man. It is perfectly true that the Consolidated Fund can be called upon if there is any dereliction of duty by the Public Trustee. The Consolidated Fund is at the back of everything and can be called upon to pay in such a case. While we have had in Sir Charles Stewart a most admirable Public Trustee—and I hope we shall find the new Public Trustee an admirable man, too it is quite conceivable that we may at some time have a Public Trustee who is not quite, so reliable as these men, and there would be temptation with such vast sums left entirely to his control. I suggest that if the matter is going to be looked into and a Committee is going to be appointed, the question should be considered whether, instead of having one Public, Trustee, there should be a body of say three, as in the case of the Charity Commissioners and other bodies, so that these large sums would not be in the hands of one man only.

THE LORD CHANCELLOR

My Lords I am not aware who the informant was of the noble Lord who called my attention to this matter, but whoever he may be, he certainly gave my noble friend a picture of the situation which is both alarmist and extremely exaggerated. I little regret that my noble friend should inadvertently have given publicity to the picture which had obviously been painted for him, because these are grave matters that one is dealing with, and it introduces a very unfortunate effect if those who, in reliance on the State, have availed themselves of the services of the Public Trustee, should read in the Press to-morrow that the whole Department is in a state of chaos, that letters are never answered, and that people had better not become beneficiaries there because they would always find themselves in arrear with the amounts they were entitled to receive. Anything less likely to recommend the institution to me, if I were in the position to make use of it, I cannot conceive.

I must not be understood, of course, as saying that there are not matters which, ten years after a new office which has greatly developed was established, would afford very proper material for inquiry, not in the least that there should be wholesale condemnation or in the expectation that condemnation would be necessary at all; but, of course, when this Office was started ten years ago no one knew what the development would be. It must, I think, on the whole, be pronounced—with qualifications which in the circumstances I should serve no useful purpose by setting out—to have been of very great public utility. The noble Lord who spoke last called attention to one of the points which certainly is the subject-matter of inquiry, but he will be reassured to know that the Public Trustee is advised by a number of most distinguished financiers, whose names perhaps there is no particular reason tonight to give. But he receives constant advice from men who are most competent to give it.

I have, with the concurrence of the Treasury, appointed a Committee to inquire into the Office, and I have done so for the reasons I have indicated. It has been in existence ten years; its staff and its work has grown, and there is the question whether it is working upon lines which are on the whole wisest and most fruitful in good results. The appointment of this Committee must not be taken to reflect upon the useful work the Department is doing, upon the efficiency with which it is doing it, and certainly not to reflect in any way upon the late Public Trustee, whose state of health we are all sorry to hear is causing his friends some anxiety. The terms of reference are—

"To inquire into and report upon the organisation of the office of the Public Trustee, with special reference to the steps to be taken for dealing with the rapid increase in the volume of work, to the number, qualifications, duties, and salaries of the present and future staff, to the questions of policy and administration involved in the estab- lishment of local offices in the provinces, and to any alteration in the scale of fees which may be rendered expedient by the result of the foregoing general and special inquiries or otherwise."

Sir George Murray has consented to act as Chairman of this Committee; and Mr. Henry Bell, of Lloyd's Pa[...]k; Mr. Samuel Garrett, of the firm of Parker, Garrett, and Company, who was President of the Law Society last year; and Sir William Plender, whose experience we all know, have accepted invitations to serve upon the Committee. It is possible that I may add a further member to the Committee, but I have not yet quite made up my mind on that point. It is hoped that the Committee will commence its operations early next month. It would have commenced its work considerably earlier but unfortunately Sir George Murray has been in the South of France, I am sorry to say on some private domestic anxiety, but it is not expected that his absence from this country will be protracted. Every one who knows him will realise that it would be a great misfortune if the Committee were deprived of his services as chairman. Your Lordships will not think it right, when this exhaustive examination is proceeding, that I should prejudge either their discussions or their conclusions.