DUCHY OF LANCASTER (APPLICATION OF CAPITAL MONEYS) BILL. (Hansard, 15 August 1921)

§ VISCOUNT PEEL

My Lords, in moving the Second Reading of this Bill I must state that the object of the measure is to permit the Duchy of Lancaster to realise capital to the extent of £100,000, and apply the same as revenue. Your Lordships are aware, no doubt, of the large deficit that there is now upon the Civil List. You are probably aware, also, that that deficit has arisen through the general rise of prices, and so on, which has increased the cost of almost everything to which the Civil List is applied. I do not think I need go into details of the deficit, which have already been very fully set out.

I should like to make this observation, however, that there would have been really no deficit but for the fact that His Majesty the King, with his usual generosity, sacrificed the surpluses which arose on the Civil List expenditure during the war, partly by a free gift of £100,000 to the Exchequer and partly in large donations to charitable purposes which appealed generally to the public during the war. I may say also that the deficit would have been larger than it is had it not been for considerable savings and economies which 598 have been practised in that expenditure, and that His Majesty has already given notice that he intends to appoint a Committee to go further into the question of economy, and to cut down, as far as possible, even the most necessary services.

In the usual course and at ordinary times, an application would have been made by the Government in another place to consider whether some temporary supplement at least should have been made to the Civil List, but His Majesty, having in mind the serious condition of the national finances at the present time, and showing thereby his public spirit in this as in all other matters, is not prepared to assent to any action being taken by the Government which will involve any additional charge on the public funds at this moment. He would also be prepared, if the Government thought it desirable, to sec a material diminution of the ceremonial splendour which is associated by tradition with the British Throne. But His Majesty's Government feel that they are expressing the opinion of your Lordships' House and of the great mass of the people of the Empire in advising His Majesty that the dignity of the Crown should be maintained with as little sacrifice as need be of the immemorial ceremonials and traditions associated with the Throne.

The object of this Bill is to enable His Majesty to tide over the present emergency and to liquidate the deficiency of the last two years and the prospective deficiency of the current year. The idea of living on capital is, of course, very objectionable to everybody, and, I am sure, to your Lordships' House, and, were it not that the Government were not unhopeful that the present difficulties were temporary and not likely to recur, they would not feel justified in presenting this Bill to the House. They think, however, that in all the circumstances the action that they propose, with the full assent of His Majesty and of the Heir Apparent, is perhaps the least objecttionable solution of a problem which is beset with difficulties.

This solution is really only possible because it happens that by the sale of land and in other ways the Duchy have a certain fund at their disposal which is invested in Government securities and which may therefore be considered to be fairly liquid. But I should like to add that some of the money so saved is really in the nature of a sinking fund, which has been slowly 599 accumulated to make up for certain wasting assets in the possession of the Duchy. Your Lordships are aware, no doubt, that these properties of the Duchy came to be annexed to the reigning family so far back as the time of Henry IV, through the accident of his succeeding to the rights and properties of John of Gaunt, Duke of Lancaster, and it is a. remarkable fact that through all these centuries these particular properties have been distinctly marked out from the usual Crown Lands and properties. They have been marked out in three ways. One is that during all those centuries they have always been administered quite separately from the other Crown Lands. In the second place, when the Woods and Forest properties, as they are called now, were handed over to the Crown at the beginning of the reign of George III and in succeeding reigns in return for the Civil List, the Duchy properties were still retained under the direct administration of the Chancellor of the Duchy. And, again, to emphasise their peculiar and different character, it has been the practice of the Sovereign, Queen Victoria, King Edward VII, and the present King, to pay Income Tax on these Duchy revenues.

But I wish to make this quite clear, that it would be exceedingly difficult to bring in a second Bill of this kind, because it would then become necessary to realise properties—lands and house property, and. so on—and your Lordships are very well aware how difficult it would be at the present time, from a financial point of view, to effect anything of the kind. I trust, therefore, that this Bill which has no precedent through the first 500 years of the life of the Duchy, may have no successor in the subsequent 500 years of its life. I beg to move.

§ LORD GAINFORD

My Lords, it is always a very difficult matter to intervene in a debate which has reference to His Majesty's expenditure, but I concur in the view expressed by the noble Viscount that it is unfortunate that a precedent has been created, in converting what is a portion of the property to which George V succeeded from capital into revenue. When I was Chancellor of the Duchy, some ten years ago, I found that the reverse was taking place in connection with the 600 revenues, and certain money derivable from mineral royalties was, in my judgment, being regarded entirely as revenue when a certain portion of it ought to be looked upon as capital, as it was a wasting asset of the Duchy property. King Edward VII agreed with my suggestion that a system ought to be established by which a regular return of a portion of this wasting asset should be invested for the benefit of the Monarch in the future, and he consented to a plan by which these royalties should partly be regarded as revenue, and partly invested for the purposes of maintaining the revenues for all time of the Duchy estates, thus so far as possible securing a uniformity of revenue for succeeding Monarchs. This policy, therefore, of realising a portion of the capital which has been invested in order to maintain the revenue is to me an unbusinesslike proposition, and I think it ought never to be repeated.

I recognise to the full how generous His Majesty has been in his attitude at the present moment, in not being prepared to ask the assent of Parliament to an increase of the appropriations to the Civil List, and I am sure all your Lordships recognise that His Majesty has set an example in regard to his personal expenditure which everybody appreciates, and no one in any quarter of the community is inclined to condemn. No one has charged His Majesty with any personal extravagance, because such charges cannot be sustained, and this deficit has arisen owing to the general increase in expenditure which has been found necessary in connection with salaries and wages and absolutely essential expenditure. We know that His Majesty has given much to charity and has helped nearly every war object deserving of support. But the deficit has arisen entirely owing to his occupying a position which requires a certain amount of ceremonial in order that the proper dignity of the Throne may be sustained. I suggest to the country, so far as I can, that it ought, in another place, to see that the amount received by His Majesty the King is sufficient in the future to maintain that position and those ceremonials which are necessary to the Sovereign of such a country as this and the Emperor of the great British Empire all over the world. I am afraid that this Bill has become necessary mainly owing to the fact that the expenditure of His Majesty's Government has been so excessive that they have not been able to advise His Majesty 601 to ask for that maintenance of his position which, I think in the circumstances, ought to be, and I hope will be, secured to him in the future.