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Savings Certificates (Interest)

Volume 487: debated on Monday 7 May 1951

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13 and 14.

asked the Minister of National Insurance (1) why applicants for National Assistance are assumed to receive a notional income in respect of any National Savings Certificates they may hold;

(2) whether she will now reduce the assumed rate of interest on any savings possessed by applicants for National Assistance, in view of the fact that the present assumed rates are much greater than the yield on trustee securities.

The treatment of capital for assistance purposes, which is prescribed by statute, does not turn on the interest actually earned: the material point is the extent to which the capital itself is to be regarded as available for the person's need.

In view of the fact that the Chancellor of the Exchequer will ignore interest on National Saving Certificates for the purposes of taxation, cannot this also be done for the purposes of computing National Assistance, and, if an element of capital spending is involved in this 5 and 10 per cent. interest rate, should not that be made quite clear?

I think the hon. Gentleman, would agree, if he thought a little more about this subject, that, although it is a good debating point, it would take more than 50 years for an old age pensioner with a capital of £400 to reduce it to £125.