§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR
My Lords, I beg to move the Second Reading of this Bill, which comes to us from the House of Commons, where it was passed without dissent. The object of the Bill can be very briefly stated: it is to enable schemes to be made by the University of Oxford or by the University of Cambridge, or by any college in either of those universities, or by Winchester College, for putting into one fund various endowments which at present are held by them or for them as separate trust funds. There is a precedent for this legislation, for by the Liverpool University Act of 1931 a similar arrangement was made for that university. It is not to be assumed that every fund 7 for the benefit of one or other of these great institutions will be thus dealt with, for in the case of trust funds not held by the institution itself, but held by trustees on behalf of the institution, the consent of the trustees will be necessary. For example, the munificent provision which has been made by Lord Nuffield in connexion with Oxford University is covered by careful modern trust deeds with separate trustees, and I should suppose that those provisions are not likely to be altered.
There are, however, a great many cases of trusts for one or other of these bodies where it would be of great practical advantage to bring about amalgamation. It may interest and perhaps surprise your Lordships to know that in the case of the University of Oxford there are no fewer than 260 trusts of all sorts and sizes: some of them providing an annual income which runs into four figures, and some of them providing only a pound or two. It is obviously inconvenient that each of these trusts should be in the hands of separate trustees, with separate accounts and with separate investments. The object of this Bill is, therefore, to enable schemes to be drawn up, and, subject to proper approval, to operate which will put these various trusts into a single scheme and consolidate them, which will provide for their management as one and which will then attribute to each unit its proper proportion of income and will, as I think every business man will at once see, greatly improve the administration of these important educational instruments. That I may not be misunderstood, let me add that of course there will be no change whatever as a result of this Bill in the purposes for which each individual provision has been made. I do not think that you will wish me to say more about the matter than that. In the other House the Bill was regarded as quite non-contentious. I commend it warmly to your Lordships as being a valuable and quite uncontroversial improvement in the finances of these institutions, and I beg to move that the Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
THE EARL OF DONOUGHMORE
My Lords, I ask your Lordships' permission to say a few words on this Bill, a Bill which I hope your Lordships will accept. 8 I have no comment at all to make on the first three clauses of the Bill, except to thank my noble and learned friend on the Woolsack for the clear explanation which he gave of them. I am sure that they will be useful. I note that they are facultative; that is to say, there is no power to impose a scheme on any body, but the body itself draws up the scheme. I am sure that a great deal of good will result if this Bill receives the Royal Assent. My interest is in Clause 4, which it so happens that the noble and learned. Viscount has not mentioned, no doubt because he regards it as a separate point. I do not like it to go through, however, without saying a word to your Lordships about it. As your Lordships are aware, the university—I speak from the point of view of Oxford, but I fancy that similar conditions occur elsewhere—has power to call on colleges, by their own statutes, to hand over a certain amount of their income for university purposes; and the University of Oxford, I am sorry to say, has followed the example of the Chancellor of the Exchequer in that the amount that the colleges have to pay is graduated, so that a big college has to make what may be a very large contribution to university finance. I do not think I can do better than outline the kind of case which may occur. If some pious and grateful ex-member of a college were to leave £4,000 to a college, with the instruction that the interest is to be used to pay a scholarship of £100 a year, in the case of a big college that might result in the college having to subscribe as much as £30 a year from its general funds in order to provide the £100 a year for the scholarship, which would have to be paid in full.
That is the kind of thing which may occur, and friendly but very active discussions have often taken place between the university and the colleges as to whether the colleges ought to pay anything at all, and, if so, how much, in connexion with any particular trust. So much is this the case that there is a tribunal appointed to deal with these matters. My friend Mr. Robert Brand is appointed by the university from their side, and I have had the privilege for some years now of being appointed by the heads of colleges and bursars from their side. It is our business to decide on any point that comes up. I do not conceal from myself that legal questions might sometimes be involved, and would come up to us as a 9 body of laymen. This is the last place in which I would not argue that there are many laymen who are accustomed to make laws and who are perfectly competent to interpret laws; but I know that that would not be a very popular doctrine with my legal friends. Be that as it may, II know that on this particular point several very high legal authorities have given opinions, but I have never yet heard of two high legal authorities who have given the same opinion. This clause, however, settles the matter once and for all, and I am therefore very grateful to my noble and learned friend on the Woolaack and his colleagues for including this clause, which I am certain will work very satisfactorily, in this Bill.
§ VISCOUNT SANKEY
My Lords, I do not desire to add to the arguments of the noble and learned Lord Chancellor, but perhaps you will permit me, as High Steward of the University of Oxford, to say how much we welcome this Bill. We are very grateful to the Lord Chancellor for bringing it forward in this House. In the difficult days that lie ahead it will effect great economies in administration, which are not only desirable but necessary, and the Bill should be a great help to both the universities and to Winchester College if it finds its place on the Statute Book.
§ LORD ELTON
My Lords, I have been asked to say a very few words to emphasize how welcome and how valuable this measure will be to Oxford University. This measure, if your Lordships are good enough to give it a Second Reading to-day and to pass it through all its stages, will represent, like so much in that ancient but eternally youthful seat of learning, a characteristic and effective combination of ancient traditions with modern financial methods. As the noble and learned Viscount on the Woolsack has told your Lordships, there are well over 250 separate trusts in Oxford University alone and, needless to say, it has in the past proved extremely difficult to keep a sufficiently vigilant eye on all these separate funds. I believe that after the last war considerable purchases were made on behalf of the university in redeemable Government securities, which were assigned, in larger or smaller blocks, to the various separate trusts, but it did not prove possible in fact to keep a sufficiently observant watch upon those funds, so that a slump in the market or the approach of 10 the maturity of a stock was not sufficiently early observed to enable the necessary "evasive action" to be taken, and consequently a good many of the funds found themselves in deficit. Since then, I understand, the arrangements for watching over these many separate trusts have been very much improved but, even so, it will be obvious to your Lordships what an enormous saving of labour must be occasioned by their aggregation into one fund. Another great advantage, of course, will be that virtually an automatic insurance will be effected for the various trusts against fluctuations in an extremely unpredictable market.
There is one further point which I think has not been mentioned and which is of very great importance. The amalgamation of these funds will make it possible for the funds as a whole to purchase real estate, whereas very few of them are likely to command sufficient resources to go into that particular market on their own behalf. And any of your Lordships who have been familiar in the past with university finance must be aware how very well investments in real estate have served the universities and the colleges. I feel myself that this Bill would be abundantly justified if its only consequence had been to make it possible for these trusts to invest in that particular class of security. I am very grateful that the noble and learned Viscount on the Woolsack pointed out to your Lordships that no interference whatever will result from this measure in the discharge of the separate and proper functions of the individual trusts. These separate trusts will of course retain their own share in the capital and income of the amalgamated fund, and will continue to pursue their own appropraite functions. The University of Oxford has had many distinguished and pious benefactors in the past, but it continues through the ages to serve the same perpetual purpose of the advancement of learning, and I hope your Lordships will find it appropriate that the purpose of a William of Wykeham or a Queen Philippa should now be furthered by business methods appropriate to the age of Lord Nuffield.
§ THE LORD CHANCELLOR
My Lords, I am glad that the Bill has received so friendly a reception. Perhaps I should say a word or two in reply to the reference to Clause 4 made by my 11 noble friend Lord Donoughmore. I gathered from his observations that, though he suspected a situation in which lawyers differed, he was well content with the conclusion by which Parliament decided. It is enough to say as a word of explanation that in Oxford at any rate—I know more about that than about the University of Cambridge—the colleges do contribute, according to their resources, to the university, and it is very necessary that they should. They do not do so under any form of compulsion, or any form of Parliamentary Statute; they do it because they agree on what a reasonable contribution should be, and it is incorporated in the college and university statutes. The method that has prevailed since, I think, 1937, when the Oxford University Statutes were amended with the consent of the colleges, is that the contribution to the mother body, the university, should be made not only out of what is called corporate revenue—the general income of the college—but, according to a certain scale, out of all trust income as well. The doubt which some bold lawyers have presumed to express is whether that was lawful. I can only say that I believe the standing counsel of the university thought it was lawful, and I have perhaps a natural prejudice in favour of people who have been standing counsel for the university. At any rate, without seeking to argue about that doubt, it is now written down in black and white in Clause 4 that that can be done, and I hope therefore that everybody is satisfied.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.