HC Deb 20 May 1969 vol 784 cc228-30
32. Mr. Henry Clark

asked the Chancellor of the Exchequer which particular income group his 'Save-As-You-Earn" scheme is aimed to attract.

Mr. Roy Jenkins

I hope that the scheme will appeal widely across income groups. But, as I said in my Budget Statement, it is directed primarily at people who at present save little and who may be attracted by a scheme which offers a generous return and facilities for regular small payments out of income, where possible by deductions from pay.

Mr. Clark

In his reply, is not the right hon. Gentleman talking about the administrative arrangements, about which we have heard nothing? Does he not consider that the long delay before any return is made on savings and the very high interest rate after tax are more likely to encourage switching among those who already own capital rather than private savings in the lower inome groups?

Mr. Jenkins

I am not discussing administrative arrangements at all. I am answering a question which asks to whom I think the scheme will appeal. In any savings scheme there is the difficulty that it is liable to appeal more intensively to people on high tax rates. This is almost inevitable, and it is something that I pointed out last year to right hon. and hon. Gentlemen opposite who were rather reluctant to recognise it. By directing this scheme where we have and by restricting the amounts to £120 a year which may be saved in each part of the scheme, I think that we shall get the main bulk of the money from the sources from which we most wish to encourage it.

Mr. Macdonald

Are the classes which my right hon. Friend has in mind not also particularly attracted to spend money on such items as provident checks and budget accounts? If the scheme is to be a success, as we all hope, is it not desirable to exercise that measure of control of these forms of spending in the same way as it is on hire purchase?

Mr. Jenkins

I recognise the force of my hon. Friend's point. That is a matter directly within the terms of reference of the Crowther Committee which is considering matters related to hire-purchase credit generally.

33. Mr. Henry Clark

asked the Chancellor of the Exchequer what market research among potential savers was carried out by his Department before deciding on the "Save-As-You-Earn" scheme announced in the Budget.

Mr. Roy Jenkins

None by the Treasury and specifically related to this scheme; but we were able to consult surveys of attitudes to savings carried out on behalf of the Post Office in 1966 and the National Savings Committee in 1968.

Mr. Clark

With the abysmal record of the Post Office Savings Bank and the poorer record of the National Savings Committees over recent years, does the right hon. Gentleman consider them to be a reliable fount of knowledge? Is it not the most primitive type of marketing to launch a scheme based on the Treasury's hunches?

Mr. Jenkins

It has not been launched on the Treasury's hunches but on the advice of those who carry responsibility to organise the scheme. The hon. Gentleman is being disparaging to those who work in National Savings Committees. Certainly it represents their view. The right hon. Member for Enfield, West (Mr. Iain Macleod) was good enough to say that there was very little difference between us on the matter. I endeavoured to arrive at the best savings scheme on the advice of those most directly concerned, not only savings committees but the C.B.I. and the T.U.C. and others, which would appeal to those in whom we wish to inculcate the savings habit.

Mr. Grant

Has the right hon. Gentleman's attention been drawn to a study carried out by the Wider Share Ownership Council among new savers, which makes it clear that new savers are more attracted by shares in unit trusts and equities than National Savings?

Mr. Jenkins

Yes, I am aware of that survey, among others. But it would not have been right to start a new savings scheme directed towards equities at the time of the Budget.

Mr. Eddie Griffiths

Has my right hon. Friend consulted the trade union movement as to the reaction of trade unionists to this excellent savings scheme?

Mr. Jenkins

Most closely. I consulted the T.U.C. and other bodies in drawing up the scheme, and I was influenced by its views as well as those of others.