Clause 2. — (Capital Expenditure for Purposes of Post Office Savings Bank Not to Be Paid Out of Post Office Savings Bank Fund.)

Part of Orders of the Day — Post Office and Telegraph (Money) Bill – in the House of Commons at 12:00 am on 13th June 1952.

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Photo of Mr Reginald Paget Mr Reginald Paget , Northampton 12:00 am, 13th June 1952

I have found this a very difficult Clause. In the previous Clause we had a complete constitutional innovation. Parliament which, previously, had always insisted on meticulous control of the expenditure of money, was invited, in cavalier fashion, to surrender that control and to vote money for the Post Office which, we were told, was not to be used by the Post Office at all, but was to be used for these defence purposes.

Now we come to Clause 2, which provides in subsection (1): For the purposes of any enactment relating to expenses incurred in the execution of the enactments relating to the Post Office Savings Bank, any capital expenditure"— mark that, any capital expenditure— incurred after the passing of this Act for the purposes of the Post Office Savings Bank shall be deemed not to have been incurred in the execution of the said enactments. Why is this? Is this really a defensive expenditure which it is unfair to put on the savings banks? If so, is it not even more unfair to put this sort of expenditure on the Post Office? It is the most curious way of dealing with the Savings Banks Act, 1929. That is an interesting Act and its terms will have to be considered by this Committee if we are to come to a conclusion on this Clause. Subsection (2) of this Clause provides: In paragraph (c) of section five of the Savings Banks Act, 1929"— and then come several lines in brackets, which I do not think I need read, save to draw attention to them as I shall be coming to the actual Section of the 1929 Act— the words 'the Postmaster-General and' and the word 'respectively' shall be omitted. Let us see what is the effect of this omission from Section 5 of the Savings Banks Act, 1929. That Section provides: For the purpose of any enactment (including this Act) which provides that the expenses incurred in the execution of the enactments relating to savings banks by the Postmaster-General and the Commissioners respectively"— and those are the words which we are asked to omit— are to be defrayed out of any specified fund, the expenses so incurred shall be deemed to include—". Then it sets out what shall be deemed to be included. This, of course, is the vital matter for the purpose of this Clause. They are: (a) such sum as, in the opinion of the Treasury, approximately represents the amount in each year of the accruing liability in respect of the benefits for which any officers or persons employed by the Postmaster-General and the Commissioners respectively in the execution of the said enactments will on their retirement become eligible under the Superannuation Act, 1834 to 1919; Here is the first question which I wish to ask. Why is it that these annuities should suddenly be borne by the Post Office— and apparently out of capital, though one would have thought that they were income expenditure—instead of being borne by the Commissioners as intended by the Act? The next item which we have to consider is: (b) such proportion of the salary, or of the said accruing liability in respect of superannuation benefits, of any officer or person who is so employed in part only in the execution of the said enactments as, in the opinion of the Treasury, is attributable to the execution of those enactments;". One has to look back earlier in the Act to see what those enactments are.

At the beginning of the Section, it is stated: For the purpose of any enactments (including this Act) which provide that the expenses incurred in the execution of enactments relating to savings banks by the Postmaster-General"— Then, quite suddenly, and for no reasons that I can understand, though doubtless we shall have some explanation, it says that such proportion of the salary, or of the said accruing liability in respect of superannuation benefits, of any officer or person who is so employed in part only in the execution of the said enactments"— which are the Savings Bank enactments —apparently ceases to be payable by the people whom Parliament said they were to be paid by, and are, like the defence expenditure, shot on to the Post Office.

Can the Minister tell us why this is so? Is this, again, concealed expenditure on defence? Are these methods whereby what is spent on expenditure on defence ceases to be a matter of Parliament and becomes something which has to be dealt with on a security basis, but concealed from the electorate?

Paragraph (c) may be even more remarkable still: any capital expenditure incurred in providing premises wholly used by the Postmaster-General and the Commissioners respectively for the purposes of the said enactments and such part of any such expenditure incurred in providing premises partly used as aforesaid as was, in the opinion of the Treasury, incurred for those purposes: That really contains three separate factors. First, we have any capital expenditure incurred in providing premises wholly used by the Postmaster-General. Second, we have the capital expenditure incurred in providing premises wholly used by the Commissioners. Then, of course, there is the additional case where they may be used jointly.

The paragraph goes on: used …for the purposes of the said enactments. Later in my speech, I will try to work out what are the purposes of these enactments, which requires looking not only at the earlier part of this Act, but at other Acts. Then, it states: …in providing premises partly used as aforesaid as was, in the opinion of the Treasury, incurred for those purposes: Why is it that we have suddenly to alter that arrangement laid down by Parliament, when, apparently, one would have thought it a sensible arrangement? Why do these expenses respectively require shifting on to the Post Office and from the people on whom they were originally placed? It is made even more interesting by a proviso which reads: Provided that, if in any case where the amount of any such capital expenditure has been charged to the said fund, the premises in respect of which the expenditure was incurred are sold"— That is the first case, so that where this Post Office money, as it is now, instead of Savings Bank money, is applied to capital expenditure for premises which are sold— or ceased to be used for the said purposes, there shall be deducted from the amount thereafter chargeable to the said fund such sum as may be determined by the Treasury.… Here we see the Treasury coming in all the time as the arbiter to represent the then value of the premises or that part of the premises which was used for the purpose.

3.15 p.m.

Why alter this arrangement? That is the point on which we are all so anxious to have information because, apparently, this was a division of the burden between the Post Office and the Savings Bank. There is the proviso that when any of this property is sold there is to be a division, a handing back, and now it is all to be borne by the Post Office. Why is that so, and what has done it?

We finally come to paragraph (d,) which is the list of these expenditures which we have to consider. It says: in the case of any premises occupied by the Postmaster-General and the Commissioners respectively wholly or partly for the purposes of the said enactments"— and those are the Savings Bank enactments— and in respect of which no rent is payable, such an amount as is estimated by the Treasury to represent the rental value of the premises or of that part of the premises used for the said purposes. Here we have the case where premises are occupied jointly by the Post Office and by the Commissioners of the Savings Bank and are used for purposes of the Savings Bank Acts, but where no rent is payable for them, such an amount as is estimated by the Treasury to represent the rental value of the premises or that part of the premises used for the said purpose after allowing for any capital expenditure incurred as aforesaid which has been charged to the said fund. This seems to be a very peculiar list of expenditures to be dealt with in this curious manner. The alteration is in paragraph (c) of Section 5 of the Savings Banks Act. The words "Postmaster-General" are to be omitted and the word "respect" is to be omitted so we get down to a reading as follows: any capital expenditure incurred in providing premises wholly used by the Commissioners for the purposes of the said enactments. Here, apparently, we have not merely a payment of the whole amount by the Post Office of expenditure in which they have at least a joint interest, but we have their exclusion where they have no interest in it at all and where it is used wholly by the Commissioners and is not used by the Postmaster-General. None the less, suddenly, the Post Office have to pay. That seems to require a lot of justification, unless we are to hear that this, again, is an instance of concealed defence expenditure.

Look at what are the purposes of this Act, that is, the purposes of the enactments for which all this expenditure has to be carried out. They are set out at the commencement of the 1929 Act. The earlier Acts are the statutes of 26 and 27 Victoria, which deal with this matter in Chapter 87 and at 54 and 55 Victoria, Chapter 21. I think I am right in saying—and perhaps my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) who knows so much about this subject will correct me if I am wrong—that Chapter 21, Victoria is the earliest of the savings banks statutes.

I think I am right in saying that it is that statute which provided for the institution of savings banks and in respect of which the original capital expenditure which we are now asked to alter was made. It was made quite early in the reign of Queen Victoria—if my memory is right, somewhere about 1842.

The second Act, which developed it to a considerable extent, was Chapter 87 of the Queen Victoria statutes, which came a good deal later in the reign and expanded this very benficial activity in public savings to an ever-widening extent. But I think that the purposes of these two Acts, which are referred to in Section 5 of the Savings Banks Act, are in some degree summarised in that Act itself, so it may be sufficient if I simply quote that Act rather than go back to the earlier Acts.

The first section, according to the marginal note, is an amendment as to security to be given by the officers of the banks. It is that very security whose incidence we are now altering. The provision with regard to that security—and this is the first purpose of this Act with which we are dealing—is as follows: The security to be given in pursuance of section eight of the Trustee Savings Banks Act, 1863"— That is the section of the Victorian Act— as amended by any subsequent enactment, may be either in the form required by that section as so amended or, if the Commissioners and the Inspection Committee approve, in the form of a single bond of a guarantee society guaranteeing all the persons employed by the bank or at any branch thereof who are required to give such security. So We see that the first purpose deal with security bonds to be given for conduct by employees. Perhaps the Minister will be able to deal with this question. Is it still the custom of the savings bank to take security bonds—fidelity bonds I believe they are called—from its employees? This was certainly the practice in Victorian times, but I should doubt very much whether it is the practice now.