HL Deb 02 March 1982 vol 427 cc1174-5

2.58 p.m.

Lord Nugent of Guildford

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will authorise the Public Trustee to appoint two or more officially quoted investment trusts to manage the funds in their responsibility on a unit trust basis.

The Lord Chancellor (Lord Hailsham of Saint Marylebone)

My Lords, the Public Trustee is already able to purchase shares in commercial unit trusts on behalf of trusts under his control. He is also the manager of the common investment funds for the investment of private money held in court, and provision is being made in the Administration of Justice Bill, which is now before this House, for the Public Trustee to purchase shares in these funds on behalf of trusts under his control.

Lord Nugent of Guildford

My Lords, I thank my noble and learned friend for that helpful Answer. Is he aware that some of us see some advantage—to a certain extent, anyhow—in differentiating the trust function of the Public Trustee from the investment function by making use of the undoubtedly strong skills in investment management in the leading unit trusts and other units in the City, thereby at the same time saving on management costs by contracting the very large number of existing portfolios by the use of unit trusts? Is my noble and learned friend aware that his Answer indicates that that is the direction in which the Public Trustee may be moving?

The Lord Chancellor

My Lords, there is a difference between the unit trust to which I referred in the last part of my Answer and the commercial unit trust to which my noble friend referred in the first part of his supplementary. Some use, of course, has been made of commercial unit trusts under the Public Trustee's existing powers, but it is not often appropriate to put the whole of a single trust fund, which may vary enormously in its requirements, into a single unit trust. The object of unitisation is defeated if a small fund is to be spread over a large number of investment schemes in the commercial sector. The purpose of the new power which is being taken is to enable the Public Trustee to use the three main common investment funds for the purpose of trusts under his control, which will not incur this particular disadvantage.

Lord Bruce of Donington

My Lords, is the noble and learned Lord aware that some of us understood the purpose of the Question to be to inquire whether the Public Trustee could appoint one or more officially quoted unit investment trusts to manage the funds in his responsibility? Will the noble and learned Lord give the House an assurance that, should it be necessary for the Public Trustee to seek outside advice for the purpose of managing the funds under his control, he will not use designated unit trusts for this purpose but will take ordinary professional advice, by hiring investment consultants, investment analysts or such other skilled personnel as he may require for this purpose?

The Lord Chancellor

My Lords, I am sorry if I misunderstood the purpose of my noble friend's original Question; I hope that I did not. In answer to the noble Lord, Lord Bruce of Donington, the Public Trustee has already the benefit of the advice of an honorary investment advisory committee. This is comprised of senior representatives from investment trusts, banks, merchant banks, insurance companies and stockbrokers, and it meets five times a year to discuss our investment policy.