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Greenwich Hospital And Travers' Foundation

Volume 440: debated on Monday 21 July 1947

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I beg to move,

"That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and Travers' Foundation for the year ending on 31st March, 1948, which was presented on 6th June, be approved."
In acordance with general custom I move this Motion formally.

10.1 p.m.

I am sure it would be convenient for the House if we follow the usual procedure in discussing the Greenwich Hospital Estimates, by asking our questions first, so that the Financial Secretary may reply to them at the end of the Debate. I see that the income for 1947–1948 is estimated to be down on the last year by £1,715. The revenue from the estates is down, especially in Northern England—by over 3,000—and the royalties from mines show a considerable drop, of nearly £5,000 from the royalties of last year. I wonder if the Financial Secretary can tell me from what mines these royalties come. Presumably they are not from coal mines. But whatever they are, I am told to tip him the wink that it might be very wise to keep his weather eye upon the Ministry of Town and Country Planning and his colleagues there, in case royalties from mines which are not coal mines drop still further in the coming year.

I cannot help feeling that the general income will fall still further in future years. So much of the Greenwich Hospital income comes from estates and capital investments, and the Greenwich Hospital will be hard hit by conversion schemes, and the estates are likely to call for considerably greater expenditure in the near future. I think it is common knowledge that estate repairs are being held up all over the country at the moment owing to the fact that there is a shortage of labour and materials. When these become more plentiful I am sure Greenwich Hospital will show a very considerable increase in the repair account on its estates throughout the country. Therefore, the very small estimated surplus of £874 this year, compared with £1,500 surplus for last year, may well turn to a deficit. We should like to know how the Financial Secretary is preparing to face that likelihood. When we come to the expenditure side, we find that that is estimated to be up during the coming year by £12,413. I think hon. Members in all quarters of the House will be glad to see that the Greenwich Hospital pensions to seamen have been increased by nearly £11,000. Equally, we welcome wholeheartedly the fact that the headquarters' administration of the whole foundation is to cost less.

I now turn to the Royal Hospital school at Holbrook, which is usually the main subject of Debate on this occasion. I am sorry not to see the hon. and gallant Member for East Hull (Commander Pursey) in his place. I will do my best to deputise for him. Those of us who have already heard the news of the setting up of a committee of management for Holbrook, with two hon. Members of this House on the committee welcome it very much. I am sure that the committee of management will rifle wisely, but I think it very necessary that they should rule quickly. I wonder if the Financial Secretary could say whether, when they have made their findings, they will issue a report, and whether the report will come before us in this House? I realise, of course, that so far their time has been short, but I hope that when the report is issued we may have it as quickly as possible. I think there is a real need for urgency so far as Holbrook is concerned. On page five of the Estimates we see that the number of boys was down to 540 for 1945–1946. Can the Financial Secretary hold out any hope to the House that there may be an increase during the year 1946–1947. The average cost per boy runs higher, at £173 5s., than ever before, and is, in fact, double what the cost was in 1939. Can we be told what steps the Admiralty are taking to reverse this trend of fewer boys and higher costs?

I would ask the House to compare the higher cost at Holbrook with the grant shown, in page 4, of £1,500 in respect of education of children of officers. This is anyhow far too low but, with the increased promotion of officers from the lower deck, that sum will become still more inadequate. As the Reade Foundation is held by the Admiralty for the benefit of Greenwich Hospital as a whole and not for Holbrook only, cannot some of that income he transferred to some of these other purposes? So far as the boys of Holbrook are concerned, we should like to know whether the Financial Secretary has anything to report on the number going from Holbrook to training ships, and whether that is satisfactory. In fact, we should be grateful to him for any information he can give us about this important school, which is one of the main sources on which the country relies for recruitment of the best men for the Royal Navy. I hope that we may have a chance of a wider Debate on Holbrook once the committee of management have had time to make their findings, and have had experience of the general running of the schools.

10.7 p.m.

I should like to ask the Parliamentary and Financial Secretary whether the pensions paid out to seamen and marines and officers are paid out of the funds of Greenwich Hospital, or whether they are paid out of Government sources, subject to a Vote of this House. I ask that because there is a taxation difficulty which arises. If they are not paid out of the Greenwich Hospital funds, I should like to know how they are paid, because on looking through the income and expenditure sides of the accounts, I can find no grant from the Government, other than the Parliamentary grant of £4,000, which has been made for some hundreds of years, and arises from the 6d. pension that used to be paid to the mercantile marines. Apart from that, I can see no Government grant which has to be voted. The reason for asking this question is, as I say, because of taxation difficulties. I have been making inquiries of the Financial Secretary to the Treasury, and he informs me that Greenwich Hospital pensions are now subject to Income Tax on the grounds that they are no longer paid from Greenwich Hospital funds. Perhaps I may quote from the statement he makes, because of its importance. In a letter dated 17th July, he says:

"In the case of the Navy, however, the age pensions were granted under the Greenwich Hospital Act, 1865, and were formerly paid out of Greenwich Hospital funds, to which a contribution was made from Navy funds. In these circumstances, they did not fall within the category of pensions payable out of the public revenue, and when the question of their liability came under review some years ago, it had to be admitted that there was no rule of the Income Tax Acts under which liability to tax was imposed upon them. It was decided, however, some time ago that the Navy age pensions should in future be paid from Navy funds; as a result of this change they are now charged to tax like Army and Air Force age pensions."
From that it would appear that the present pensions, which are stated in detail on page 4, that is to say, £30,000 granted to seamen and marines, and £7,810 granted to officers, are probably liable to tax whereas, in fact, they should not he liable. I ask the hon. Gentleman—if he affirms, as I think he is bound to do, that these pensions are paid out of hospital funds—if he will convey these sentiments to the Financial Secretary of the Treasury, and ask that in future these pensions should not be subject to tax. If it is possible, I would like him to instruct the Financial Secretary to see that those claims are admitted for repayments where tax has been deducted in error.

10.11 p.m.

I think f ought to start by formally declaring my interest in this matter as both I and the hon. Member for South Cardiff (Mr. Callaghan) have been recently appointed to the committee which is doing its best to manage Holbrook Hospital. I ought to tell the House that the unanimity on that committee is almost indecent for an inter-party committee, but perhaps that is because it has been in action for such a short time. I ought also to say that I hope the House will not criticise us too strongly at the moment, because we realise that there is a great deal to do and we are endeavouring to do it. For those reasons, I do not propose to talk about the school tonight, but to say a few words on the general report which has been presented to the House.

The first thing that anybody who looks at this report, or any financial report of this type, wants to know is how much of the income is being used for the purposes which, presumably, it was intended by its providers it should be used. That question deserves close scrutiny, because the gross amount is £205,000 per annum, including the Reade Foundation Trust income which, obviously, can be put in as Greenwich Hospital income. Capitalised, the £205,000 per annum amounts to a large sum, about £6,750,000. For that, pensions are being paid at the rate of £55,000 per annum, and 540 boys are being educated. I do not think that that is very good value for money, and I think the House should look into this question, not now but perhaps in the future, to see whether that money is being administered as economically as possible.

I want to refer to what might be described as "transferability" inside the Greenwich Fund. The Reade bequest produces an income of something over £16,000, and there is this very small amount of money towards the education of officers' sons. I would like to know whether that money can be transferred? Can a grant be made towards officers' sons, and daughters too, who are deserving cases? I would like to know who authorises the grant, and also the exchange from one part of the fund to another. I hope the Parliamentary and Financial Secretary may find it possible to reply to these questions tonight.

10.15 p.m.

We are asked tonight to pass these estimates. I hope that the First Lord and the Financial Secretary to the Admiralty have carefully examined them, because I have a feeling that many of these estimates are made out by civil servants and are passed on without examination.

I am glad to see that the hon. Gentleman shakes his head, which makes it easier for him to answer my questions. Are we making sufficient of the assets of Greenwich Hospital? I would draw attention to two—the rents of the property, including market premises and tolls in Greenwich—£16,100. I do not know anything about them, but I do know something about the next item—rent of Greenwich Hospital buildings lent for the purposes of the Royal Naval College, £10,000. This is a magnificent block of buildings between Greenwich Park and the Observatory on the bank of the Thames. The present buildings were constructed by Sir Christopher Wren, and include in them the old Painted Hall, now the mess. There is nothing to beat them anywhere. It was previously the residence of royalty, and practically every serving executive officer has passed through Greenwich. It is a place of great memories; and £10,000 is not enough, although it may have been years ago. Is that sum based on the yearly rental, and is the sum fixed every year or for a long period? If there is a long contract, nothing can be done, but if any opportunity comes for an increase, I think it should be taken. On page 2, hon. Members will observe

"Greenwich Hospital pensions to seamen and marines (including Greenwich Hospital Canada pensions), pensions to widows and education of children."—
are being increased by £10,000—a very laudable object. No one would give that more support than I would, but where do the poor officers come in? Not another bean; not another penny. They get the same amount as before:
"Greenwich Hospital pensions to officers and grants towards the education of children (including Greenwich Hospital Canada educational grants)"—
£10,000 the lot. What a miserable sum. I am confident that if the Royal Naval College buildings were put up to tender in the open market that £10,000 would be more in the nature of £30,000, with greater benefit to the pensions of officers. I hope that the Financial Secretary to the Admiralty will tell us how that £10,000 is arrived at, how often it is looked over, and that when the next opportunity comes a far greater rent will be demanded and given to the officers.

10.18 p.m.

I am a little confused about the point raised by the hon. Member for Chertsey (Captain Marsden). He talked about Greenwich Hospital and its beautiful building. Greenwich Hospital does not now house the school. The school is now in Suffolk where it has its own admirable buildings. He raised the point which was also raised by the hon. Member for Hereford (Mr. J. P. L. Thomas), as to whether or not pensions for dependants of officers should be increased. I think that it is a point of substance because I realise that prices have risen and that if pensions for ratings are to be increased correspondingly, there is no moral justification why the pensions for the dependants of officers should not also be considered. I am perfectly willing to consider that, but I cannot say more at the moment.

I come to the point raised by the hon. and gallant Member for North Portsmouth (Major Bruce). He asked whether pensions were payable from Greenwich Hospital funds or Naval funds and whether they were taxable or not. They are paid out of trust funds and they are not taxable. The hon. Member for Hereford asked me a number of questions on where we got our income from and in particular he was instancing the income from royalties. He may be interested to know that the royalties come from zinc and lead mines at Nenthead in Cumberland, which are run by a Belgian company, the Vieille Montagne. It is a rather obscure and curious point, but it is so. That company run the mines for us and they pay us royalties for so doing. The hon. Member was concerned that we were not getting perhaps all the income that we could. He thought that we might reinvest some of it and in some manner increase it. We are only too anxious to do this wherever possible. In fact, we are looking closely at our source of income, and if we find securities which can be sold with benefit and exchanged for some other form of security, we shall do so. We have in fact made certain investments. We buy land and sell securities, or else we sell land and buy securities.

Then there was the question of Holbrook. Hon. Members will see that there is an increase of £1,000 a year in the expenditure total, and some people may ask why that is so. As regards the question of cost per boy, I can assure hon. Members that we are going to appoint a bursar. We have a large number of applications and we hope to secure a bursar of such excellence that he will be able to effect considerable economies in the running of the school. I cannot say more than that. The reasons for the increase this year have been largely due to factors outside our power. The rates have increased and wages have increased. It is not because more people are employed but because of the increased rate of wages. There is one point where we are directly responsible and that is in regard to the pay and allowances. We intend to pay £100 per annum allowance for the ten housemasters, because we want to attract the best possible type of men.

The hon. Member for Hereford asked a question about the number of boys. I am glad to say that the number of boys is, in fact, rising, though the rise is small. Last year there were 553 boys; this year we have 571, and I hope before long we will pass the 600 mark. In this connection there is one matter I should like to mention, and it is that at present our medical standard is very high. It is the standard based on that for boys due to enter the Royal Navy. Naturally, not all our boys can enter the Navy, and it is for consideration whether, in fact, we could somewhat lower that medical standard and admit slightly more boys. Fourteen out of 75 who apply to enter Holbrook failed on medical grounds, and some of them may have failed because the standard was too high. We are considering whether we cannot lower the standard slightly.

As I told hon. Members last year the advisory committee was going to he reformed and we have a management committee of which I am chairman and of which the hon. and gallant Member for Horncastle (Commander Maitland) and the hon. Member for South Cardiff (Mr. Callaghan) are both members. Knowing both these hon. Members we can expect great things from them in the future, and we hope to see considerable improvement in the school before long. The school has been through a difficult period, but I think it is definitely on the up grade. As I say, more boys are entering and 57 per cent. of those who left last year went into the Navy and I hope that that percentage may even go up. We do, in fact, now supply a considerable number of boys for our training ships.

In my general capacity as Parliamentary Secretary, I have been not only to the centres, but also to the training establishments to which those boys go. I have seen the success which they have at the training establishments where they mix in with all the other boys and are doing exceedingly well. For the time being, the present deputy headmaster is acting as headmaster, and I should like to pay my tribute to the excellence of the work he has performed during his short tenure of office. In due course we shall, of course, have to choose a headmaster, and I hope that before I report to the House again we may in fact have appointed one, and that I shall he able to report even further progress. With those few words, I hope that the House will agree to these Estimates which I think show a satisfactory state of affairs

Would the hon. Gentleman answer a specific question? Can the Reade Bequest be used for other objects than Holbrook, and also who has the power to decide whether new allocations of this character will be made?

With permission, I will answer that question, which I am very sorry that I overlooked. It can in fact be transferred on the authority of myself acting for the Board of Admiralty.

Question put, and agreed to.

Resolved:

"That the Statement of the Estimated Income and Expenditure of Greenwich Hospital and Travers' Foundation for the year ending on 31st March, 1948, which was presented on 6th June, be approved."