§ Finally, I have something completely new for the saver in Great Britain; that is, a Premium Bond. Let me say at once that this is not a pool or a lottery, where you spend your money. The investor in the bond which I propose is saving his money. He will get it back when he wants it. But as long as he holds it saved, his reward, instead of interest, is the chance of winning a tax-free prize. 880 The idea is, of course, not novel. Various forms of it have been advocated in the Press recently, and schemes of this kind are being operated by the State in more than one country overseas. But, hitherto, the State in this country has fought shy of using chance as an incentive to save—I suppose for two reasons.
§ First, there has been the fear—and, I hope to show, the unreasonable fear—of moral objections to rewards for saving based upon fortune. Secondly, there has been reluctance to lay out the organisation—it is, of course, a big organisation—which has to be made ready before the public can be invited to subscribe with the risk that the public may not like it. But I venture to conclude that the moral objection is not really valid, and that the prospects of success make the outlay on organisation well worth while.
§ Let me deal with the moral objection. This is not gambling, for the subscriber cannot lose. Let me put it in this way. This is an encouragement to the practice of saving and thrift by those members of the community who are not attracted by the reward of interest, but do respond to the incentive of fortune. My object is to invite the people to save for interest—in which case they buy the new Defence Bonds—or save for the chance of a prize, according to their preference.
§ The details of the scheme will be announced later. There is a great deal of organisation to do, but this is an outline of the essential features. It will be a £1 bond. There will be a limit on individual holdings—at any rate, at first—for we want the savings of ordinary people. The limit might be 250 to start with, or a little more; I am not quite certain. A holder will get back his £1 on giving due notice. Each £1 bond that has been held for a fixed period will qualify for a draw to take place every three months. As for the prizes, I have in mind to begin with an annual prize fund equal in amount to 4 per cent. of the bonds drawn, divided into prizes ranging from a few top prizes of £1,000 to a larger number of prizes of smaller amount.
§ Now I come to organisation. To handle the new money subscribed to these bonds on the large scale which I confidently expect, my right hon. Friend the Postmaster-General has a big organisation to plan and build up. This, of 881 course, goes on top of all the work which I hope my proposals regarding Savings Certificates and Defence Bonds will be giving him in the coming months. The Premium Bonds themselves must be printed in very large numbers. They will be held as savings, and that means that he must organise a register for each individual holder. The drawing arrangements are themselves a somewhat novel administrative problem. For all this, premises must be obtained and staff recruited. The Post Office must be given time to get ready.
§ I doubt whether we shall really be ready until the end of this year, or the beginning of next year. [HON. MEMBERS: "Oh!"] We will get on as quickly as we can. I am sorry to have to ask you to wait so long, Sir Charles, but I suggest that while you are waiting you might put some money into the savings bank so as to have it ready for the Premium Bonds.
§ At any rate, this interval can be put to good use by another body that is vitally concerned in my plan—the National Savings movement. Naturally, I have not been able to consult the movement in advance. I hope that after studying the terms they will feel that it preserves and encourages the principle of thrift for which the movement stands and works. I offer all this new range of securities as a challenge to the National Savings movement. What increase in national savings will the movement get? I am sure, very large. The securities are really attractive to every class of saver. To make them so, I have broken rules. It is now up to the movement to break all records.