§ Mr. SpeakerI remind hon. Members that this debate will finish at 2.30 p.m.
§ 2.2 p.m.
§ Mr. Edward du Cann (Taunton)I am pleased, for several reasons, to have the opportunity of raising this most important subject.
First, all my life I have been a supporter of the national savings movement. I am aware of the imperfection, of national savings as a pure savings medium. It is all too easy to be cynical about them and to describe them merely as cheap Government finance. I should know those imperfections well enough, because my commercial career has been chiefly devoted to the savings industry, for example, in establishing the modern unit trust movement and introducing to the United Kingdom the unit-linked life assurance concept—a development which is still largely underestimated—and the rescue and development of a life assurance company. I am proud of my connection with that commercial company and declare my interest.
I have had a lifetime's practical experience of commercial savings of all, kinds but I am proud to be associated with the national savings movement. For many years I have been involved at first hand with its efforts to popularise thrift—and how successful it has been, with £12,000 million invested; to encourage savings among all classes of our fellow citizens of all ages, from the youngest to our most senior citizens; to teach money management to those who might otherwise not learn about it and be very much the poorer, in every sense of the word, in consequence. It is good work the Movement does; it is worthy and valuable work. It should continue with every encouragement from the House.
Some of the details are impressive. There are no fewer than 30,000 workers' groups involving 2 million members. One in 10 of all workers save regularly through the national savings movement, and last year they raised no less than £350 million. There is also the work in schools. There is, properly on the part of the teaching profession, a great demand for educational work in money matters. A need is fulfilled here. There are 18,000 school savings groups, involving 1.3 million young people.
958 However, it is not only money that we are talking about; much more important, we are talking about the social purpose of the movement—and how excellent and significant that social purpose is, and how well it is fulfilled.
The work of the movement is carried through with devotion, skill and patience, and often with much personal sacrifice on the part of individuals, in terms of time and treasure. This is a dedicated corps of volunteers—no fewer than 70,000 of them. They are aided, abetted and guided by a small team of civil servants who are as conscientious and enthusiastic as their fellow workers in the movement.
As a former vice-president of the Somerset and Wiltshire Trustee Savings Bank, until that local and efficient institution—well managed by citizens of repute and competence, my friends and neighbours—was forcibly and, in my view, unnecessarily merged into a more anonymous West Country bank, as president of the Taunton Deane National Savings Association, and, last but by no means least, if the Minister of State will not think me immodest, as a former Treasury Minister responsible for sponsoring the Trustee Savings Bank Cheques Act—the first development in the work of trustee savings banks in 20 years or so—naturally I have a real interest in and anxiety about the future of the national savings movement.
Second, being in touch with grass roots opinion, with the voluntary workers, I am only too well aware that the Government's proposals for the future, namely, the decision to remove the Civil Service supporting staff—a decision that was made without any warning or consultation with the movement, and that was inexcusable—are a source of genuine and deep concern in the movement. The Chairman described the decision as "incredible—a great shock". The decision was bad, foolish and unwise.
The concern of the voluntary workers cannot and should not be underestimated. "Concern" is, in some part, perhaps, too mild a word, for many people feel, besides uncertainty, a degree of irritation and resentment that it should be proposed that their unselfish efforts should be rewarded—if that is the right word—by a withdrawal of support—and in Jubilee Year, and after the commotion caused by the withdrawal of the savings stamp. My hon. Friend the 959 Member for Hampstead (Mr. Finsberg) well knows about that, for he played a part in leading a deputation to Ministers. After all that turmoil, this new trouble has happened.
Accordingly, it is proper that this subject should be raised in Parliament, and I repeat my gratitude to you, Mr. Speaker, for allowing me to raise it after sending you a number of requests. The movement should be aware that we in Parliament are appreciative of its members' work and sensible of their interests. Many of us care about them and their work, and care deeply, and I am sure that the Minister, for whom I have a warm personal regard—I am grateful to him for being present to answer this debate—will wish to associate himself with that tribute and sentiment.
We are all familiar with the ritual genuflexion of the Chancellor of the Exchequer in the direction of the movement in his annual Budget speeches—of which we have had nine in just over two years. I hope that it is not now an insincere affair. We are familiar, too, with other repeated specific pledges—time does not allow me to quote them all —of "full Government backing" for the movement, which have fallen from the lips of successive Ministers. The Government must keep their word in this 60th anniversary year of the movement. They have been trusted by the House of Commons and by the movement to do so.
Let me come to certain specific questions which are in the minds of the workers in the movement. We all want public expenditure to be controlled. There is no stronger advocate of that than I, unless I do myself an injustice, unless my stronger view is that we should obtain value for money. Never mind. The question is why this particular economy should be made. Why should this economy of only some £2 million, involving only 580 civil servants, have priority, particularly as it followed the decision of an earlier Chancellor to reject the recommendations of the Page Committee?
Why should there be this cut-off of what is, after all, the most popular national savings body? Should not the House, and Ministers do everything possible to encourage the voluntary spirit? Should we not do all we can to help the people's savings facilities, which is what the 960 national savings business is? It is the most convenient savings medium of its sort. It serves the small saver. Surely a most curious methods of cutting the amount of money that the Government need to borrow is to sack the 583 people who are out there helping the Chancellor to borrow it. What is the logic of this. What incontrovertible justification is there for this step? I hope that we shall hear it.
Let us hear, for example, why depriving the national savings movement of support is a proper contribution towards making the economies that we must have. I want to hear why Ministers think it right to endanger the largest voluntary movement of its kind in the world. I want to hear why it is thought sensible, in the opinion of the Cancellor, to endanger a movement that encourages thrift and reduces the amount that the Government have to extract or extort in tax. I want to know why it is believed to be wise policy to endanger a movement which has increased national savings by some £900 million in the past year—10 per cent. of the public sector borrowing requirement, which is not a bad return for the outlay of about £2 million. If I did that commercially, I should be pleased and proud.
On the face of it—and it is the time for truth—there can be only one explanation; that this decision is a decision basically to abandon the voluntary effort, a decision by Ministers that they will be careless of it, a decision, in effect, to nationalise the industry.
Are there no better economies that could be made? I do not believe that there are not. I want to make some suggestions. As the Minister knows, I have the honour to be the Chairman of the Public Accounts Committee. The hon. and learned Gentleman was a most distinguished colleague on that Committee. No one was more assiduous, careful and incisive in questioning than he was. I regretted his promotion in one way because it prevented him from still being there to do a remarkable job. He therefore knows that there are other choices.
During this year, the Committee examined 43 subjects. From that list, I can suggest at least half a dozen alternative sources of equal or much larger savings. For example, there is the aid to industry—the shipbuilding industry has received between £80 million and £100 million. Let us take the aid to other 961 commercial enterprises, which totals twice, three times, four times, even 10 times the amount that is being saved here. Let us take the report that the Committee made about the Inland Revenue. On 1st April 1975, it had a staff of 74,000. On 1st April 1976 the figure was 81,000. It is estimated that on 1st April 1977 it will be up to 90,000, if there is no change in the question of personal tax allowances. My hon. Friend the Member for St. Ives (Mr. Nott) has pointed out that if we made only those changes in the system which would be easy to make, and which would not involve great loss of revenue, at least 20,000 staff would be saved.
Let us take the Manpower Services Commission. There, the number of civil servants between 1974 and 1976 increased by 37 per cent.—from 33,000 to 46,000—and the budget has gone up from £96 million in 1974–75 to £424 million this year.
I take these examples deliberately because I want it understood that there is plenty of scope for other savings that would do no harm. I dare say that hon. Members could suggest other and better economies, as alternatives. I am sure that people in the national savings movement could equally readily do so.
There is, I can assure the Minister, no resistance among the voluntary workers to sensible change. The successful adoption of its new constitution and the restructuring of the voluntary movement are sufficient and clear evidence of that.
Let me be plain. I am clear in my own mind—as I believe would be the majority of hon. Members on both sides of the House, as this is not a party matter—that the Government are making a mistake. It is only the high patriotism and sense of duty of these 70,000 voluntary workers that is precluding a shoal of protests falling on hon. Members and Ministers from millions of savers at this decision.
The movement is especially lucky in having so remarkably high a calibre of leadership at all levels—distinguished men like Sir John Anstey and Lord Elgin in Scotland, where there is a fine tradition of leadership, and, in the South-West, people like Francis Showring and Roy Walwin, together with conscientious people on the professional staff, including the Secretary and Chief Commissioner, Mr. Kenneth Pinch and Mr. Nicholas.
962 I believe that this true devotion caused the decision to set up the Radice Committee. I knew Mr. Radice well, and admired his work greatly when I was at the Treasury. In a week or two, that committee will come forward with its recommendations. I hope that the Minister of State is able to give an unqualified assurance that the Government will accept and give support to them. I would prefer him to do more—to tell the House that he is willing to say that the decision to make this saving is to be re-examined.
I am sure that the decision is wrong in every sense. This national savings movement of ours is a great national asset. It has a proud and honourable record. It is a most significant body. It provides an invaluable service. It is totally relevant to the needs of modern society. Not least a duty we have in Parliament is to give it generous and committed support, and I hope most devoutly that the outcome of this debate will be to enable us to give such support.
§ 2.17 p.m.
§ Mr. Geoffrey Finsberg (Hampstead)I am grateful to my right hon. Friend for Taunton (Mr. du Cann) for allowing me time to intervene. I raised the subject of national savings and the national savings stamp as long ago as November 1974, when the first announcement was made. I have had an active interest in national savings for more than 30 years, in running a national savings group, as a member of the board of the London and South-Eastern Bank until it was amalgamated, and as a member of the Trustee Savings Bank Parliamentary Committee. I have an interest in the voluntary savings movement.
What the Chancellor is doing here runs counter to the Page Report. While that report was good, it did not give sufficient emphasis to the value of the voluntary effort in the movement. But that voluntary effort cannot exist without the professional back-up that it has had for so many years. The cut-off of the national savings stamp and now the removal of professional help will have far-reaching effects and will mean an inevitable drop in the amount of money that national savings collects. Subsequent Chancellors of the Exchequer will regret this step, which also means the 963 death knell of many groups and committees aimed at both the old and the young.
I want to emphasise one point made by my right hon. Friend. The savings habit instilled by national savings groups may of itself, in terms of actual cash, mean little for the Treasury, but it starts a lifetime's habit of thrift and saving. If one does not start young enough to learn the habit of saving it may not come later in life. That is the major crime of which the Chancellor will be guilty if he allows the national savings movement to be deprived of its professional staff. There is no call in this sense for extra public expenditure but there is a call for reallocation by a cost-benefit analysis.
I believe that any examination on that basis would come up with the answer that the support staff ought to go on. I therefore join my right hon. Friend in urging the Minister even at this late stage to reconsider the decision, because I believe that, if the national savings movement is deprived of the permanent staff—civil servants who have done such loyal work—in 12 months' time, if and when the present Chancellor produces his eleventh, or twelfth, or thirteenth Budget, he will have to say that the level of national savings is no longer as great as he would wish. Let us hope that there will be a new Chancellor by then, coming from this side of the House, but the present Chancellor alone will have to take the blame.
§ The Minister of State, Treasury (Mr. Denzil Davies)Both the right hon. Member for Taunton (Mr. du Cann) and the hon. Member for Hampstead (Mr. Finsberg) have, as they have indicated, shown great interest in the national savings movement. The right hon. Gentleman has devoted most of his life in one way or another to fostering savings in general, be it through the unit trust movement or the national savings movement. I accept entirely his great expertise and knowledge in this field. The hon. Gentleman has also shown great interest in these matters.
The national savings movement, as hon. Gentlemen will accept, is more than a voluntary movement. I say that in no derogatory sense. It is a partnership of national savings, the Trustee Savings Banks and the voluntary movement. We 964 are concerned here with the withdrawal of the 560 or so civil servants employed by the Government as support staff for the voluntary movement.
The right hon. Gentleman talked of an attack on the national savings movement. I am sure he will agree that this is not an attack on the movement, in the sense that all outlets are still there for saving. The concern here is with the voluntary movement, which I think—the hon. Member for Hampstead accepted this—has possibly not contributed as much as the other outlets to the total of £12,000 million. I do not criticise them or denigrate what they have done, but I think this would be generally accepted. The very nature of the movement is such that it cannot contribute as much.
One of its main functions, I concede, has been in thrift education. This is very important. I shall come back to the Radice Committee shortly. There should be a continual education of children especially in thrift. It is important that this should be done by a movement of this kind, and I accept that that has been its main contribution in recent years.
The right hon. Gentleman asked why we had to do it. We had to do it because we are constantly asked to reduce the bureaucracy. I do not mean the bureaucracy of national savings, but Government bureaucracy. The right hon. Gentleman is Chairman of the Public Accounts Committee—I served on it under him—and he will know that we have been asked to reduce current expenditure on the bureaucracy. I remind the House that the withdrawal of 570 support staff was part of a decision by the Government to effect a reduction of 26,000 in the Civil Service in general. We were not singling out the voluntary movement. This has to be seen in the context of a reduction in savings of about £95 million and a reduction of 26,000 in total in central Government bureaucracy. The 570 support staff were part of that decision.
It does not emanate from the Page Report or from anything except a need—which I am sure the right hon. Gentleman recognises—to do something to keep down the growth of the bureaucracy. It is easy to state that principle but very difficult to apply the priorities without hurting different sections and different areas. Unfortunately, the Government had to make a decision and look at all Departments.
965 We might be asked why we did not take a bit more off the Inland Revenue or the Department of Industry. The right hon. Gentleman will know that these matters are considered in great detail and that at the end of the day a view has to be formed as to the priorities of the contribution made in the particular area in which we want savings. It was against that background that we had to withdraw the support staff.
It is not part of an attack on the voluntary movement. It is part of a much larger problem of containing the growth of the bureaucracy. It would be wrong for me to hold out any hope that the decision can in any way be reversed. The Prime Minister wrote to Sir John Anstey on 5th August 1976 stating that he was afraid there was no scope for reconsideration. Lord Elgin, in Scotland, had been informed in exactly the same terms.
I pay tribute to Sir John Anstey and to Lord Elgin. It has been a very difficult time for them. I understand their feelings very well and the great difficulty of having a decision foisted upon them without prior consultation. I accept that there was no prior consultation. The reason is that this was a decision in total on £95 million taken at the highest level of Government. In those circumstances it was not possible to have consultation, although afterwards I saw both of them and also the staff side. I appreciate entirely their difficulty, and I pay my tribute to them for the responsible way in which they have accepted this blow. Through the Radice Committee and the committee in Scotland, they got down to trying to see how the voluntary movement can manage in the new difficult situation brought about by the withdrawal of the support staff.
It will not be easy. The Radice Committee was not set up to shun the problem. It is difficult to see how the voluntary movement can operate in future, but I hope that both committees will bring forward recommendations early in the new year. We shall look at them, but I cannot make any commitment from the Dispatch Box this afternoon before I know what is recommended.
We did not like taking this decision, which is one of the many difficult decisions that the Government had have to take. It gave me and the other Ministers 966 no pleasure to have to take it, but we were faced with a difficult situation. The national savings movement as widely defined will continue to make an enormous contribution to Government finance. I do not believe that at the end of the day the movement will be damaged by this very difficult period of restructuring.
§ Mr. du CannBefore the Minister sits down, may I press him a little more on the subject of the Radice Committee? He must know by now the general outlines of the likely report. Is it possible for him to be a little more forthcoming about accepting the recommendations, even though I tell him that many of us will be pressing him to go a good deal further and to overturn the original decision?
§ Mr. DaviesI am sorry to disappoint the right hon. Gentleman. I do not know what the general lines of the recommendations of the committee are likely to be. That is not a diplomatic ministerial answer but a fact. When we have the recommendations, however, we shall look at them.