HC Deb 10 March 1981 vol 1000 cc764-5

Imaginative use of national savings can help to reduce pressure on the capital markets. Thanks to the initiative announced last autumn we have already achieved our national savings target of £2 billion for 1980–81.

For 1981–82 we have set the still more ambitious target of £3 billion. New measures are needed for that. We therefore propose two important changes to the second issue of index-linked certificates or"granny" bonds. From the beginning of next month the age of eligibility for these certificates will be reduced from 60 to 50—[HON. MEMBERS:"Maggie bonds".] I am glad that the House is willing to join with me in recognising the declining age of grandmothers. From the beginning of next month the age of eligibility will be reduced from 60 to 50 and a minimum bonus of 4 per cent. will be provided for all holders, both new and existing.

A reduction in the interest rate on the national savings investment account from 1 May will be announced later this month. That will be compatible with keeping interest rates on national savings instruments competitive enough to achieve our target.

In October last year my right hon. Friend the Secretary of State for Energy announced plans for a bond which would allow the public to share in the benefits of the nation's North Sea oil resources. The Government intend to issue such a bond later this year. It will be aimed at small savers and will be a non-marketable certificate, administered by the Department for National Savings. Its capital value will be fixed, but the return on the bond will be linked to the value of the British National Oil Corporation's North Sea oil.