§ 2.38 p.m.
Lord Campbell of CroyMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what were the approximate percentages of the population of the United Kingdom who owned shares in companies in 1979 and 1985 and what is their estimate of the percentage in 1988.
§ The Parliamentary Under-Secretary, Department of Transport (Lord Brabazon of Tara)My Lords, estimates vary, but recent survey evidence suggests that up to 17 per cent. of the adult population now own shares. It is generally accepted that the number of shareholders has doubled since 1979. The Government expect further substantial increases by 1988.
Lord Campbell of CroyMy Lords, I am grateful to my noble friend for that reply, which shows a remarkable trend. Is he able to confirm the impression that many of the new investors in companies take a personal interest in both the good management and the success of the companies concerned? Does he agree that this is a healthy development for the British economy?
§ Lord Brabazon of TaraMy Lords, I most certainly agree with my noble friend. It is a very good thing if investors take a close interest in the companies in which they have bought shares. They should read the annual reports and do their best to encourage those companies to act efficiently.
§ Lord Taylor of BlackburnMy Lords, is the Minister aware that this is not a new idea? Even up to 1979 over 10 million people in this country had shares in the Co-operative Movement, took an interest in their societies and played an active part in the running of these societies.
§ Lord Brabazon of TaraMy Lords, that may well be the case, but I think my noble friend's Question refers to shares in quoted UK companies.
Lord Bruce of DoningtonMy Lords, is the noble Lord aware that we on this side of the House fully support the freedom of small investors to remove their savings from building societies and other savings accounts and, if they wish, to put them into equities? However, in view of the fact that the financial columnists and the financial press are not subject to the provisions of the Financial Services Act, will the noble Lord consider giving a public warning to the effect that shares can go down as well as up, and that gambling can be dangerous to your financial health?
§ Lord Brabazon of TaraMy Lords, I am sure that the public do not need telling by me or by the noble Lord, but I am very happy to give the warning that share prices can go down as well as up.
§ Lord Murray of Epping ForestMy Lords, is the noble Lord aware that whatever the merits of wider share ownership, it is not necessarily desirable that employees in companies should be encouraged to invest their savings in those companies? In the event of a company getting into difficulties, that employee is then in double jeopardy both as regards his savings and also his job.
§ Lord Brabazon of TaraMy Lords, the noble Lord makes a good point. Nevertheless, we encourage the formation of employee share ownership schemes, and we have in fact been very successful in that. In 1979 there were only 30 such schemes; there are now over 1,100.
§ Baroness SeearMy Lords, will the noble Lord agree that, in view of the growing burden of debt, which is becoming a very great problem in many areas, people should not be encouraged to borrow in order to invest?
§ Lord Brabazon of TaraMy Lords, I think that the opportunities for borrowing against share purchase are not particularly widespread in any case. However, obviously one must put one's priorities in the right order and invest in shares only when one can afford to do so.
§ Lord Harmar-NichollsMy Lords, will my noble friend bear in mind that to some extent it is 230 undesirable for the Government to give guidance on these matters? It is for people to make up their own minds on the evidence which is before them. To intervene under the guise of calling it guidance would interfere with free expression and people's desires in such matters.
§ Lord Brabazon of TaraMy Lords, my noble friend is quite right—I am not attempting to give guidance to people as to whether they should or should not purchase shares. I was asked to give the number of people who have done so, and I gave the Answer to that Question.
§ Lord Mackie of BenshieMy Lords, will the noble Lord define a small shareholder; and as he has the figures, can he give us a figure for the number of small shareholders, and then tell us what proportion of the total number of shares they own and whether that proportion has risen since 1979?
§ Lord Brabazon of TaraMy Lords, I am not quite sure that there is such a thing as a specific definition of a small shareholder. As regards private shareholders as opposed to institutional shareholders, I gave that figure in my original Answer.
§ Lord Taylor of GryfeMy Lords, will the noble Lord the Minister assure us that in the prospectus for any new issue in privatisation schemes some reference will be made to the Labour Party's plans for renationalisation in the event of its electoral victory?
§ Lord Brabazon of TaraMy Lords, I believe that that is the case in Government share offers. I think that that is particularly the case at present with British Gas.
§ Lord MellishMy Lords, is not the definition of a small shareholder one who holds a small number of shares?
§ Lord Brabazon of TaraMy Lords, the noble Lord has put his finger on it; but the question would then be: what is the definition of a small number of shares?