§ Order of the Day for the Second Reading read.
§ THE UNDER-SECRETARY OF STATE FOR WAR (LORD STRATHCONA AND MOUNT ROYAL)
My Lords, the purpose of the 937 Bill the Second Reading of which I desire to move in your Lordships' House this afternoon is a very simple one. It is to enable us to alter the present anomalous position of certain charitable funds belonging to thirty-five units of the Army. Over eighty years ago an Act was passed under which the then existing charitable funds of regiments were transferred compulsorily into military savings banks. This operation saddled the Secretary-at-War, an official whose functions were subsequently absorbed into those of a Secretary of State for War, with responsibility for the capital and enabled him to fix the rate of interest subject to a maximum rate. The Act in question was the Regimental Benefit Societies Act of 1849, which was replaced by a further consolidating Act in 1859. Regimental charitable funds which have come into existence since 1849 are not subject to this compulsory treatment, and in point of fact most of them are held and invested by the United Services Trustee, a corporation which dates from 1918. The United Services Trustee charges a small acceptance fee on taking over a fund, but does not make any charge for the business of investment and paying the interest to the regiments concerned and the modern system has the advantage of saving money to the regiments when there are changes of personnel in these regiments which would mean changing the names of the trustees. Further, the funds in the hands of the United Services Trustee are not subject to a maximum rate of interest.
Parliament would have been asked some years ago to redress this anomalous position of the thirty-five funds which were subjected to the Act of 1849 if the market price of the securities in which they are invested had allowed of this action without loss to public funds. But since the War this has not been the position. Under the old Acts the Secretary of State is responsible for the capital at its original value, and the actual market value has been too low to enable a transfer to be made without considerable loss, which the public would have had to bear. At the present time there is every prospect of being able to transfer the funds without loss to the public, but as the market price varies this Bill is permissive in its terms. It does not say that the Secretary of State shall pay over 938 the funds to a new holding trustee, but that he may do so with the consent of the Treasury; and it is not proposed to act on the permission accorded by this Bill unless the payment can be made with either no loss at all to the public or so small a loss that the Treasury does not object to it. This is the purpose of the first clause of the Bill.
The second clause goes on to provide that the new holding trustee shall invest the funds and pay the interest to the regiments concerned, and that the Secretary of State shall make orders binding the Commanding Officers of any regiments concerned to apply the interest to the same charitable purposes to which they must be applied under existing regulations. There is also a further provision in Clause 2 (3) that if anything happens, such as the disappearance or amalgamation of a unit, to make it impracticable for the regimental trust to exist any longer the Charity Commissioners or any Court which possesses jurisdiction in relation to the regimental trust, shall have power to make a scheme for the application or management of the fund.
The objects, therefore, of the Bill are twofold: First, to relieve the Secretary of State of a responsibility which is a burden and has now become superfluous; and, secondly, to place the thirty-five regimental charitable funds concerned in the same position as the majority of other regimental charitable funds, conferring on them thereby a certain benefit in that the rate of interest to be paid to them is not limited by Statute. I may add that the capital value of the funds in question is about £71,600. We hope by the early passage of this Bill to take advantage of the state of the market to redress this old and useless anomaly which I have described. I beg to move.
§ Moved, That the Bill be now read 2a, (Lord Strathcona and Mount Royal.)
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.