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Savings

Volume 891: debated on Thursday 1 May 1975

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4.

asked the Chancellor of the Exchequer what measures he proposes for the encouragement of greater personal savings.

Personal savings have been at a high level in recent months and the facilities offered by the Government are kept under close review.

Was it not remarkable that the Chancellor made no reference to personal savings in his Budget Statement? Is it because Ministers are afraid to acknowledge that inflation is running well in excess of 20 per cent? Any conventional savings scheme is likely to be a monumental fraud on the saving public who are suffering arbitrary confiscation of their assets to the tune of millions of pounds a day.

The figures over the past four years speak for themselves. Over the past year the level of personal savings has been the highest since 1970. This compares with the decline in 1971, 1972 and 1973. The new savings schemes have been very well received, as the figures conclusively show.

Does the Minister accept that all national savings certificates with the present derisory rate of interest should bear the words "This document carries a Government financial risk warning"? Does the hon. Gentleman accept that if he wants to increase national savings he must raise the rate of interest?

The hon. Gentleman must be aware that the returns from national savings are fully competitive with those available in the private sector. The fact that in the first quarter of 1975 we have had a net inflow into national savings of £191 million, compared with £25 million in the same period last year, is evidence of the attraction they still offer to those of limited means.

8.

asked the Chancellor of the Exchequer whether he will address later this month the annual conference of the national savings movement.

I regret that other commitments will prevent my right hon. Friend attending, but my right hon. Friend the Paymaster-General has accepted an invitation to address the annual assembly on 9th May in his place.

Before that conference next week, will Treasury Ministers reconsider the decision to abolish the savings stamp? The Chancellor of the Exchequer is in a genial mood today. Will he look a little beyond the arguments of the bigwigs and the officials in his Department and ask himself whether, at a time of savage inflation, he really should abolish the traditional means by which thousands of individual citizens have learned to put something by?

If I may respond with a genial explanation, unfortunately over the past 20 years there has been a steady fall in the number of selling groups in villages and town streets. It has not been possible to find the recruits which would be necessary if sales of savings stamps were to continue, quite apart from the factors of cost, the failure to earn interest and the other problems associated with stamps. There are real difficulties which the national savings movement itself has not so far been able to overcome.

Does the hon. Gentleman agree that profitability has something to do with the falling off in national savings? Comparing the interest received with the fall in the value of money, in real terms is there a net loss or a profit?

I assume that the hon. Gentleman is talking about national savings generally. Although, obviously, in times of inflation it is very difficult to get real rates of interest, the hon. Gentleman must remember that this applies to the private sector, too. Those who put their money into the private sector in the past year in a number of cases have done remarkably badly. For the ordinary small saver, national savings have provided ready access, ease of withdrawal, and security. In addition, due to the introduction of the new index-linked forms of security, we have an extension into an area which I am sure the hon. Gentleman will welcome.