§ 11.10 a.m.
§ Lord GainfordMy 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 progress has been made to date in stimulating the wider ownership of capital in the United Kingdom.
§ Lord CockfieldMy Lords, the Government have made significant progress in promoting the wider ownership of capital in a number of different areas. In particular, improvements in the tax incentives for profit sharing and share option schemes in the 1980 Finance Act have been successful in encouraging wider ownership of shares, and the further improvements announced in this year's Budget should help to build on this success. Other examples of Government actions designed to spread the ownership of capital are the arrangements made to give council tenants the right to buy their homes, and improvements in the 403 capital gains tax régime. We have also introduced various measures, such as the Business Start-Up Scheme and Venture Capital Scheme, which are designed to encourage wider investment in new businesses.
§ Lord GainfordMy Lords, I thank my noble friend for that Answer. May I ask him to enlarge a little on two of the schemes he has mentioned? First, as regards council houses, has he a figure of the number of tenants who have taken up their rights under the Housing Act 1980 and, secondly, what success has the Business Start-Up Scheme had so far?
§ Lord CockfieldMy Lords, so far as the first of my noble friend's points is concerned, approximately 250,000 tenants have now bought their houses and a further ⅓ million have had their right to buy acknowledged by their landlords. So far as the Business Start-Up Scheme is concerned, this was introduced in the 1981 Budget. It is still too early to give actual figures of the take-up of relief, but there have been a number of investment funds set up for this purpose, and a great deal of interest has been shown. The present Finance Bill does, in fact, contain further improvements in the scheme.
Lord Wallace of CoslanyMy Lords, is the noble Lord aware that the very desirable objective which the Government have in mind could be enhanced by a more generous approach to the lower paid sections of the community, such as hospital ancillary workers, nurses et cetera?
§ Lord CockfieldMy Lords, if I may say so, that raises a quite different issue from the Question on the Order Paper.
Lord MorrisMy Lords, would my noble friend agree that perhaps the greatest stimulation to the wider ownership of capital is Her Majesty's Government's highly successful fight against inflation, in that that in itself stimulates savings with which capital can be acquired by ordinary members of the public?
§ Lord CockfieldMy Lords, I entirely agree with my noble friend. A reduction in the rate of inflation has many beneficial effects.
Lord OramMy Lords, does the noble Lord's memory go back so far as mine, to the day when the Conservative Party came out with the revolutionary slogan, "A Property-owning Democracy"? While the answer which the noble Lord has given this morning indicates some approach to wider ownership of capital, is it not the case that we await the day when we can have a better approach to democracy relating to the democratic decisions concerning the use of that capital? Can the noble Lord give us any hope in that respect?
§ Lord CockfieldMy Lords, my memory does indeed go back to the days when the Conservative Party invented the slogan, "A Property-owning Democracy", and it extends over the period when they have brought 404 that slogan into real effect. So far as control over the ownership of property is concerned, this country is a democracy and its laws are passed by Parliament, and they make whatever provisions may be thought to be appropriate in that respect.
§ Lord NorthfieldMy Lords, is it not the case that pension funds and life insurance companies now own more than half of the shares on the Stock Exchange and that, on present trends, they will probably own most of them in the 1990s? Is it not important for the Government, politics quite apart, to begin to examine whether such pension funds are fully democratic, fully accountable, since these 11½million people who, quite properly, are spreading ownership in this way by their contributions to these pension funds are at the moment not fully protected democratically and are not totally in control, as they should be, of the decision-makers in those funds? This is an issue which is now causing increasing concern.
§ Lord CockfieldMy Lords, the noble Lord's question strays far from the one on the Order Paper. I would, however, join him in paying tribute to the very valuable part played by the pension funds and the insurance companies in enabling people to build up modest amounts of capital and to protect themselves against their old age and other contingencies.
§ Lord KilmarnockMy Lords, first may I declare an interest as a member of the Wider Share Ownership Council and then ask the noble Lord whether the Government will give serious consideration to introducing something along the lines of the French loi Monory?
§ Lord CockfieldMy Lords, the question of the introduction of a scheme on the lines of the loi Monory has been considered on many occasions. We believe that the series of specific measures which we have taken, including the Venture Capital Scheme and the Business Start-Up Scheme, are targeted more directly to the problem and are likely to be more cost effective.