HC Deb 04 November 1954 vol 532 cc575-6
12. Mr. H. Fraser

asked the Chancellor of the Exchequer whether, in view of the national policy to attract 2 million new savers, he will now consider taking steps to free from Income Tax the interest derived from Post Office savings accounts up to a sum commensurate with other forms of national saving which are tax-free.

27. Mr. Slater

asked the Chancellor of the Exchequer, in view of the requests that have been made in the country to the people to save more, what consideration has been given to the small investors in Post Office Savings and Trustee Savings Groups for exemption from tax on interest payments.

Mr. H. Brooke

An investment bearing interest which is free from Income Tax is available to the small saver in the form of National Savings certificates. My right hon. Friend has recently increased the maximum permitted holding of certificates of the current Ninth Issue from 700 to 1,000. I am afraid I could not contemplate extending tax exemption to interest on Post Office and Trustee Savings accounts also.

Mr. Fraser

Surely my hon. Friend is aware that the probe into small savings introduced by the late Socialist Government is extremely unpopular with many savers? Surely he will agree that the extension of National Savings certificate holdings from 700 to 1,000 puts the smaller saver who works through the Post Office Savings Bank at a disadvantage compared with the larger saver? Will he consult the Post Office and Trustees Savings Banks and the National Savings Committee to see whether something cannot be done to devise a scheme whereby something equally attractive can be offered to the really small saver through the offices of these banks?

Mr. Brooke

I am ready to do anything in my power to stimulate savings, but I must point out to my hon. Friend that National Savings certificates are on sale at only 15s. each. Therefore, one has not to be a very large saver to be able to purchase one certificate.

Mr. T. Williams

What special virtue have National Savings certificates which is not possessed by the Post Office Savings Bank for the same amount of money saved?

Mr. Brooke

The difference is that if one puts money into a savings certificate one is putting it there for a considerable time, but one can put money into the Post Office Savings Bank and draw it out again within a few days.

14. Miss Ward

asked the Chancellor of the Exchequer whether, in view of the new savings scheme promoted by the National Savings Committee, which gives tax advantages to the employer and the employee, he will also take steps to exempt these savings from Income Tax when they are finally drawn in old age by the beneficiaries.

Mr. H. Brooke

I am not quite sure what my hon. Friend has in mind, but I am afraid I could not agree that all income from savings schemes should be entirely exempt from Income Tax, whatever the total income of the recipients.

Miss Ward

Will my hon. Friend invite the Chairman of the National Savings Committee to lunch and ask him why it is that there are all sorts of exemptions for people who are working and earning salaries and wages, while so little help is given to people in their old age when they need the benefit from savings, which is to my mind very much more important?

Mr. Brooke

I can tell my hon. Friend that the Chairman of the National Savings Committee has been so kind as to invite me to lunch, and I look forward to an early opportunity of discussing with him all matters that seem to be of benefit to the saving community.