Government Securities

HC Deb 15 June 1961 vol 642 cc627-8

26. Mr. Lipton

asked the Chancellor of the Exchequer the reasons for the declining market value of British Government securities, in particular three-and-half per cent. War Loan; and what action he is taking to arrest this decline.

27. Mr. Jay

asked the Chancellor of the Exchequer what steps he proposes to take to arrest the decline in the price of British Government securities.

Mr. Barber

Movements in interest rates, and thus in the values of British Government securities, reflect conditions in the capital market. It would be contrary to practice to say anything about the future.

Mr. Lipton

Is the hon. Gentleman aware that many decent patriotic citizens, some in quite humble circumstances, bought War Loan, for example, years ago and they feel that they are the victims of a gigantic swindle and that the Government do not care two pins about them except to repeat these worn-out, soulless economic clichés? Is not this a shocking and heartbreaking state of affairs, for which the Goverment must accept a heavy burden of responsibility?

Mr. Barber

I certainly understand the difficulties of the people of whom the hon. Member has spoken, those who hold War Loan in particular, but I am afraid that the fall which there has been in the value of War Loan does not affect the considerations which, as I explained to the House last December, have determined the Government's decision in this matter.

Mr. Jay

As innumerable small savers have suffered huge losses, and, indeed, the National Insurance Fund, which is held in trust for the contributors, has now made losses amounting to nearly £400 million, are the Government completely indifferent and complacent about the plight of all these unfortunate people?

Mr. Barber

No, Sir, we are not indifferent. But after the fullest consideration, we came to the conclusion, for reasons which I gave at length last December, that we could not assist in the various ways which had been suggested.

Sir C. Osborne

Since War Loan is now down to 55, which is nearly half the price a lot of people paid, especially during the war, when they felt that they were in some way helping the Government by buying this stock, should not something be done to put a floor beneath this stock so that it will give people the feeling that they have not been diddled in their patriotism?

Mr. Barber

If we were to put a floor beneath War Loan as my hon. Friend suggests, that would in effect entail a commitment upon the Government to buy at the support price all stock offered, however large the amount. My right hon. and learned Friend simply could not contemplate such a commitment.

Mr. H. Wilson

Since this is the third Question this afternoon which has shown up the costly effect of the Government's high interest rate policy, is it not time that the Government reconsidered the whole of their policy, the more so as they have been telling the House that they are now coming round to acceptance of the general doctrine of the Radcliffe Report?

Mr. Barber

Once again, that goes much wider than the Question. The factors which determine the level of interest rates cannot sensibly be considered at Question Time.

Mr. Lipton

In view of the completely unsatisfactory nature of that reply, propose to raise the matter at the earliest possible date.