§ The Chancellor of the Exchequer (Mr. James Callaghan)
I now turn to the subject of savings. Nineteen sixty-six is the jubilee year of the Savings Movement; but this is in one sense a sad prelude to that occasion. Successive Chancellors, in their Budget statements have paid deserved tributes to Lord Mackintosh, who, since 1948, had been Chairman of the National Savings Committee. To me falls the sad duty of speaking of his death. He told me shortly before he died that he 277 had worked with no fewer than 12 Chancellors of the Exchequer. As the Committee knows, he had become the inspiration of the Savings Movement. His death has removed an outstanding public servant. One of the great strengths of this country is that we are well blessed with men and women who, without thought of reward, but from a sense of public duty, are ready to devote themselves continuously to the service of their fellow citizens. I am sure that the Committee would wish to join me in paying tribute to the memory of Lord Mackintosh. [HON. MEMBERS: "Hear, hear."]
I should like to express my thanks to all the voluntary workers who labour so hard in the cause of National Savings. In particular, I thank those employers who offer savings schemes to those employed in their firms for regular investments in National Savings securities. About 50,000 groups already exist in industry. I hope that more will be established. The last year was again a good one for National Savings; the total amount invested increased by £316 million. It now stands at about £8,380 million.
I am glad to say that I have been able to find a worthy successor to Lord Mackintosh. My invitation to become Chairman of the Movement has been accepted by Sir Miles Thomas. His energy and leadership are well known to us all and, with Mr. Archer, in Scotland, the Savings Movement will continue its great work. One change is being made in regard to the Movement in Scotland. What has in the past been called the Scottish Savings Committee will, in future, be known as the National Savings Committee for Scotland. I hope that this change will remove any misunderstanding there may be about the status of the Scottish Committee.
I have been considering the scope of our National Savings facilities. I do not consider that any change is needed at the present time in the terms of the existing National Savings securities. But I have been reviewing a number of suggestions for new types of savings facility. One of them is that of a unit trust run by the Government or a Government agency, and available to subscribers through Post Offices. This is an interesting idea, which 278 has many attractions. But I do not propose that we should embark upon it at the present time, since the Post Office will be busy with another scheme which I now wish to announce.
This scheme is a new departure in Government savings. It concerns the Post Office Savings Bank, the most familiar and widely used of all our facilities for small savings. The Bank offers an unrivalled service for the ready deposit and withdrawal of money by millions of people who maintain accounts with it. Ever since its inception, over a century ago, the rate of interest paid on Post Office Savings Bank accounts has been 2½ per cent. The time has come when those who deposit with the Post Office more than small amounts should be offered the possibility of a rate of interest higher than 2½ per cent.
Accordingly, the Government have decided to introduce a new form of account at the Post Office Savings Bank which will be open to anyone who maintains a certain minimum balance in an ordinary Post Office Savings Bank account and is prepared to give at least one month's notice of withdrawal. It will be called an Investment Account and the funds placed in such accounts will be invested in Government and local authority securities. The rate of interest paid to depositors will he related to the current yield of those investments. In the conditions of today the rate would probably be about 5 per cent. One advantage of the scheme will be that as it grows, as I hope it will, new funds will become available from this source of investment with local authorities. A similar scheme is at present operated by the Trustee Savings Banks.
Legislation will be needed. My right hon. Friend the Postmaster-General will introduce this and give further details of the scheme in due course. Partly because of the need for legislation, it is bound to be a little while before the scheme can be brought in; but we shall press ahead with it as rapidly as possible. These Investment Accounts will be a valuable supplement to our range of investment opportunities for the small and smallest saver, and I emphasise, once again, that the need for additional savings is very great if we are to finance the modernisation and reconstruction of our nation.