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

Well, Sir Charles, they come under capital as defined by Section 5 of the 1929 Act, which is incorporated by Clause 2 (2) of the Bill we are now considering, because Section 5 of the 1929 Act expressly, as I said earlier, brings in the annuities as the purposes which are to be transferred by Clause 2 (2) from the Commissioners to the Post Office. Whether from an accountancy point of view it would be correct to describe them as income or capital I do not know, but I would humbly submit that it is not really relevant. What is relevant is whether they are capital for the purposes of this Bill.

3.45 p.m.

That Section provides a special definition of this capital by reference to Section 5, which includes these payments as capital payments. I should have thought that that was correct. An annuity has two aspects. It has a capital value, which is the lump value that, I understand, is being transferred, and an income value, which is the annual payment. It is in the case of the capital value that the transfer from the Commissioners to the Post Office appears to be taking place. So I should have thought that that would come in.

The only question I wish to put to the Minister is whether, now that the annuities are to be transferred from the Commissioners to the Post Office, the limits which the 1929 Act imposed on these annuities are still applicable in the hands of the Post Office. It is not a very clear question, and over the week-end the Law Officers will have an opportunity to apply their minds to that. I do not think that Section 12 can be affected because it really deals only with an accountancy matter, so we can pass on to Section 13, which deals with the actual investment policy of the Commissioners. It says: There shall be included among the securities in which the Commissioners may invest in pursuance of section nine of the Post Office Savings Bank Act, 1861"——