§ 27. Mr. Barnettasked the Chancellor of the Exchequer what is his latest estimate of the increase in real net savings from the new scheme outlined in his Budget.
§ Mr. Roy JenkinsI am confident that Save As You Earn will produce worthwhile new savings, but as I said in my Budget statement it is not possible to calculate the response in advance.
§ Mr. BarnettThe Chancellor said in his Budget Statement that he would measure the response and seize it. Does it mean that, if in 1969–70 there is a substantial response, he will adjust some other part of his strategy, that is to say, to allow money supply to grow at a greater rate, or perhaps to have an autumn Budget to reduce taxation?
§ Mr. JenkinsMy hon. Friend persists in talking about money supply. I prefer to talk about the effectiveness of credit policy as a whole. But to the extent that savings gave a substantial response in 1969–70, or indeed in any other year, this would have an automatic effect on the level of credit created.
§ Mr. GrantThe Chancellor has said that there should be a substantial increase in savings. Has he considered the dis-savings created by his overdraft proposals in the Finance Bill? If the scheme is a success, will he extend it to equities if necessary, some time in the future?
§ Mr. JenkinsI recognise the part played last year by the hon. Member for Harrow, Central (Mr. Grant) in encouraging savings schemes, but I find his logic a little difficult to follow. I find it difficult to see that a tax disincentive to borrowing will encourage dis-saving. On the second part of his question, dealing with investment in equities, I would not close my mind to it, though I believe that at the moment it is overwhelmingly desirable to invest at fixed interest.