National Savings (Hansard, 25 October 1973)

§ 12. Mr. Horam
asked the Chancellor of the Exchequer what action he intends to take about National Savings following the Page Report.

§ Mr. Barber
Consultations with the Trustee Savings Banks Association, the National Savings Movement and other interested parties are continuing, and I am not yet in a position to make a further statement.

§ Mr. Horam
Is it not a disgrace that the Treasury, which has been swindling ordinary people for years by paying lower rates of return on National Savings than almost anywhere else, is now stalling so outrageously when it has the opportunity to make some amends? We have now had this report for over seven months. When will there be some action on it?

§ Mr. Barber
I entirely disagree with the hon. Gentleman. He has no justification for saying what he did. It is generally recognised that the Page Report raises a number of complex issues which need to be discussed with outside bodies. This is what we are doing, and we shall report in due course.

§ Mr. Dykes
Does my right hon. Friend agree that while the take for National Savings this year has been reasonable it has not been as good as was expected at the beginning of the year? Does he further agree that the position will not be restored properly unless there is an index-linked form of National Savings?

§ Mr. Barber
I agree that this is one of the most important questions that we must decide.

§ Mr. Sheldon
The remark by my hon. Friend the Member for Gateshead, West (Mr. Horam) was wholly right. "Swindle" was the word to use in this connection. Is the Chancellor aware that some people who are holding millions of pounds worth of the early issues of savings certificates are getting a rate of interest which is less than 2 per cent. in money terms, not real terms, when the current rate of inflation is between 9 per cent. and 10 per cent.?

§ Mr. Barber
As both my hon. Friends said at the time the hon. Gentleman was speaking, these people should send in their certificates.

§ Mr. Ridley
Does my right hon. Friend agree that, at a time of both high rates of interest and inflation, there is a case for an index-linked bond, which would help him to borrow the money necessary to cut the Government's deficit?

§ Mr. Barber
I can only repeat that this is a most important issue, on which we must make a decision. I think that my hon. Friend will understand that I do not wish to anticipate it. The fact is that many forms of saving, not just National Savings, are affected by inflation. This is just one more very cogent reason why it is so important to take every action that we can to bring inflation under control. If hon. Members who have asked me questions on this matter are genuine in their concern for small savers, they should throw their support behind the Government's counter-inflation policy.