Life Annuities.

Oral Answers to Questions — Scotland. – in the House of Commons on 14th March 1922.

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Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

106.

asked the Financial Secretary to the Treasury whether, in view of the fact that in the last periodic review of the business done in life annuities through the National Debt Commissioners and the Post Office Savings Bank (Cmd. 298, 1912) no statement is made as to the actual profit or loss arising, he will arrange that in the forthcoming periodic review this profit or loss is clearly shown calculated on the ordinary insurance actuarial basis?

Mr. YOUNG:

The Noble Lord's comparison is not feasible. The moneys received for the purchase of life annuities are by Statute applied forthwith to the purchase and cancellation of debt, the life annuity becoming a charge on the Consolidated Fund. Consequently no life annuity fund (comparable to that of an insurance company) exists, and it is therefore not practicable to present an account relating to Government life annuities in the form prescribed for life assurance companies' accounts. The mortality investigation now proceeding is undertaken mainly for the purpose of estimating the financial effect of the annuity operations, and the Report to be presented to Parliament will give the results of the examination.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

Are we to understand from that answer that the Govern-in doing this business, keeps no account as to whether profit or loss arises? Why are not accounts kept in a similar manner to that in which insurance companies have by Act of Parliament to keep their accounts?

Mr. YOUNG:

I think the answer to that riddle—if I may say so—

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

It is not a riddle, it is a fair question.

Mr. YOUNG:

Well, I will substitute "difficult" question. No accounts of profit and loss are kept, because no profit or loss accrues.

Photo of Mr William Ormsby-Gore Mr William Ormsby-Gore , Stafford

Is it not clear that there may be a considerable loss to the taxpayer?

Mr. YOUNG:

The case is stated in the annual statement; other information as to mortality experience will appear in the report to which I have referred.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

Is the hon. Gentleman aware that in the report in question there is no statement of profit and loss at all; is he aware that in the opinion of the best actuarial experts in the City, the result of the Government's business in life annuities is to give them a very heavy loss which they have hitherto succeeded in not disclosing to the public through this House?

Mr. YOUNG:

The answer to the first part of the question is in the affirmative; as to the second part, no. I have not yet had any such body of opinion brought to my attention.

Photo of Viscount  Turnour Viscount Turnour , Horsham and Worthing

Will the hon. Gentleman allow me to introduce a deputation to see him on the subject?

Mr. YOUNG:

Yes.