HL Deb 27 October 1966 vol 277 cc366-8

3.3 p.m.

LORD SALTOUN

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what would be the purchasing power of the amount in August, 1966, of £1 invested in National Savings Certificates in August, 1946, and continually re-invested on maturity, as compared with the purchasing power of the original £1 in August, 1946.]

LORD SHEPHERD

My Lords, £1 in vested in National Savings Certificates on August 1, 1946, and continually re invested, would have a current cash value of about £1 19s. 5d. on August 1, 1966. Taking the purchasing power of the pound as 20s. in 1946, its value in August, 1966, is approximately 9s. 9d.

LORD SALTOUN

My Lords, I thank the noble Lord for that Answer, and I would ask him whether those figures do not rather justify the inhabitants of this country in their distrust in the pound and whether we can blame foreigners for losing faith in the pound if its Red Queen progress has been as the just stated.

LORD SHEPHERD

My Lords, I would reply to that supplementary in two phases. First, on the new issue, the twelfth issue, of the National Savings Certificates, in the first six months £259 million has been subscribed, as compared with £61 million in the corresponding period of the previous year. So it is clear that the new issue announced by the Chancellor of the Exchequer in March of this year has proved very attractive to savers. With regard to the first point about the risk and dissatisfaction with regard to the pound, this is one of the curses of inflation. It is something which not only this country suffers from. This is one of the reasons why this Government have laid so much stress upon the need of productivity, prices and incomes—that incomes should rise only in line with increased productivity. There is no other way of preventing inflation.

LORD CITRINE

My Lords, with reference to the answer that has just been given, may I ask this question? Has the Minister in mind the figures given in another place by Sir Edward Boyle on December 5, 1961, when, speaking as the Secretary to the Treasury, he said that, taking the 1914 value of the pound as 20s., it had fallen to 7s. 7d. in 1946, and that in 1960 it had fallen to 4s. 6d.

LORD SHEPHERD

My Lords, with out notice, I do not think that I should comment on the figures my noble friend has given. But, as usual—I think the House will always say this—he speaks with a great deal of accuracy.

VISCOUNT ADDISON

My Lords, can my noble friend tell me whether this situation with regard to sterling would not apply with equal force to almost any other currency in the world?

LORD SHEPHERD

My Lords, I think I should make it clear that what we are discussing is the internal value of the pound. As I said in my first supplementary answer, this is one of the curses of inflation, which has cursed pretty well all the developing countries in their process of development.

LORD BYERS

My Lords, is the noble Lord aware that during the whole of those twenty years we have had one Conservative Government after another?

LORD SHEPHERD

My Lords, I gather that that is the fact.

LORD SALTOUN

My Lords, I thank the noble Lord for his answer. With regard to the success of the investment, I would say that when my ship sinks under me any hen-coop is welcome.