HL Deb 12 March 1969 vol 300 cc463-5
LORD RATHCAVAN

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 whether they propose to take any action with a view to improving the marketability of British Government securities, the prices of which are now lower than they have ever been in spite of the very high return obtainable from them.]

LORD BESWICK

My Lords, my right honourable friend the Chancellor of the Exchequer has no proposals to make at present.

LORD RATHCAVAN

My Lords, may I ask the noble Lord two supplementary questions? First, would he not agree that it is a bad thing for the country that the gilt-edged market should remain in the doldrums as it is at present, thus damaging our image abroad and leading to much greater cost in relation to any new loans which have to be issued? Secondly, may I ask him whether he is aware that in some countries, for example in Australia and in South Africa, institutions such as insurance companies are obliged by law to hold a proportion of their assets in Government securities? Might not a scheme of that sort help here? Might it not also be a good plan to exempt all Government securities from capital gains tax? Might not another measure be to sponsor on behalf of the Government an advertising campaign, to draw attention—

SEVERAL NOBLE LORDS: Speech!

THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD)

My Lords, I feel that I ought to intervene. The purpose of Question Time is, of course, to elucidate information, but I have a suspicion that the noble Lord is making suggestions to my noble friend. I think he ought to keep his questions to the point and, if possible, in the form of genuine questions.

LORD RATHCAVAN

My Lords, I thought I was asking a question. My last question was to ask the noble Lord, Lord Beswick, whether it might not be a good thing for the Government to sponsor an advertising campaign to popularise Government securities among the general public, including the smaller saver.

LORD BESWICK

My Lords, I quite agree with the noble Lord, Lord Rathcavan, that it is a bad thing that this country should be in the economic situation which we inherited from the previous Government.

SEVERAL NOBLE LORDS: Oh!

LORD BESWICK

And, of course, the position of gilt-edged reflects that economic position. Our task is to get the balance of payments right, when there will be repercussions in the gilt-edged market. The noble Lord also asked whether it would be possible to have some alleviation of taxation, and he put forward the very constructive idea of an advertising campaign. I will bring both of those suggestions to the attention of my right honourable friend.

LORD BYERS

My Lords, on the question of an advertising campaign, may I ask what the small saver has done to deserve this threat?

LORD BESWICK

My Lords, I am not quite sure what the noble Lord is getting at.

LORD BYERS

My Lords, why encourage people to buy stocks which will continue to go down under this Government?

LORD BESWICK

My Lords, I think it would probably not be a bad idea if there were some campaign to offset the vigorous campaign that one sees in the Press seven days a week, and especially on Sundays, denigrating gilt-edged.

LORD BYERS

My Lords, the noble Lord is being very unfair. This is not denigrating gilt-edged. The state of gilt-edged is a reflection of the confidence that people feel in the Government.

LORD BESWICK

My Lords, I thought I opened up with a statement, which did not attract a lot of support from the Benches opposite, that the state of the gilt-edged market reflects our economic position generally, which we have not as yet put right.

VISCOUNT ADDISON

My Lords, will the noble Lord consider taking steps to inaugurate a small, cumulative sinking fund for the purchase and drawing of these undated stocks, and so help bolster the price of them over a period of time?

LORD BESWICK

My Lords, that is one of a number of similar proposals which have been made and which I will see are considered by my right honourable friend.

LORD BALOGH

My Lords, does my noble friend realise that the suggestions coming from the opposite Benches are in strict contradiction of the policies enunciated in another place by the spokesman on finance, and will inevitably lead to heavy inflation in monetary circulation, which is the bugbear of the Conservative Party in the Lower House?