UK Shareholders: Statistics (Hansard, 21 April 1988)

§ Lord Young of Graffham
My Lords, the joint Treasury and Stock Exchange survey carried out in January and February this year estimated that 9 million people owned shares; 20 per cent. of the adult population. This represents a threefold increase since 1979.

§ Lord Gainford
My Lords, I thank my noble friend the Minister for that impressive Answer. Has he any information as to what impact the recent so-called Stock Market crash has had on share ownership?

§ Lord Young of Graffham
My Lords, I am glad to say that as far as we can tell the events of 19th October—the day when all the stock markets around the world seemed to fall substantially—have had no discernible impact. It seems that smaller shareholders have proved to be good long-term investors.

Lord Bruce of Donington
My Lords, can the noble Lord inform the House as to whether the figures he has just quoted, which relate to January and February, are in any way affected by the reported fact that as of Tuesday last over 700,000 new shareholders in British Gas were in default with their second instalment? On the assumption that they do not make good that default, is it not the case that the number of shareholders will have declined as of now compared with the year 1986?

§ Lord Young of Graffham
My Lords, frankly, no. I am sure the noble Lord, Lord Bruce of Donington, 1620 must be aware that last week was not January or February of this year, which was the date of the survey. Even if some of the shareholders decide not to take up their shares that may well not affect the number of shareholders in the country because they may already be existing shareholders.
Today, no less than 3 per cent. of the population hold shares in companies for which they work. We are finding that the desire to be a shareholder in the company for which one works, or in one of the other great companies in this country, is a desire which is spreading widely. Further, despite all the efforts of the noble Lords opposite, I suspect that that trend will continue.

Lord Bruce of Donington
My Lords, is the noble Lord aware that we on this side of the House are in full support of those people who have funds available to make what investments they choose? It is the availability of the funds to them that is important. Is the noble Lord further aware that the rate of savings under his administration has sunk to an all time low compared with the year 1960 and is at present running at roughly under one-half of the rate of savings achieved in 1979?

§ Lord Young of Graffham
My Lords, when I have the great pleasure of bringing to your Lordships' House the Bill dealing with steel privatisation I shall look to the noble Lord, Lord Bruce, for support, even if that support is limited to those who are willing to invest funds.

§ Lord Barnett
My Lords, I agree with the Minister about the goodness, so to speak, of having more shareholders. Nevertheless will he accept that it is not necessarily a good thing for someone who has the whole of his career invested in his own company as an employee to also have a major part of his own limited capital in that company?

§ Lord Young of Graffham
My Lords, I agree with the noble Lord, Lord Barnett, that of course prudence in investment is as good as prudence in anything else in life. However, it is indeed good that those who work in companies should feel that they have some stake in the future of the company with which they can identify.

§ Lord Taylor of Gryfe
My Lords, will the Minister comment on the geographical distribution of share ownership? Is he aware that in the South-East 25 per cent. of the population are share owners as against 12 per cent. in Scotland? Is not that further evidence of the North-South divide and does not that cause him some concern?

§ Lord Young of Graffham
My Lords, that could perhaps be evidence about Scotland. I do not see that it shows any evidence of the North-South divide. Looking at the figures of those people who own shares in this country, it seems to me that they are spread throughout all income groups. I hope that those in Scotland have as much faith as those in the South in the future of the private sector.

§ Lord Molloy
My Lords, while in my estimation, at least, the figures given by the Minister seem to be rather encouraging, is there not some apprehension that many adult shareholders are part of an organisation which might be controlled by foreign investment? Many other people have shares in what they think is a British organisation but in point of fact the controlling factor is a foreign organisation. Does he not agree that the situation might be looked into?

§ Lord Young of Graffham
My Lords, at a time when the United Kingdom is the second largest net overseas investor, it does not behove us to look at those companies in this country which have foreign control. If we were to do that, we as a nation would suffer far more.

Lord Winstanley
My Lords, I wonder whether the noble Lord can tell the House how many people have forfeited housing benefit as a result of having £6,000-worth of shares?

§ Lord Young of Graffham
My Lords, the noble Lord may care to put down a Question, as that is another matter.

§ Lord Monson
My Lords, does the noble Lord agree that the Big Bang has been a total disaster as regards small shareholders, given that the threefold to fourfold increase in the rate of minimum commission since that date makes dealings in a few hundred pounds-worth of shares wholly uneconomical?

§ Lord Young of Graffham
My Lords, I perhaps have greater faith in the workings of the market. If there is a demand for smaller shareholdings, I suspect that we shall find people who will be ready, willing and able to deal for such shareholders. We shall have to see how the situation develops.

Lord Bruce of Donington
My Lords, perhaps the noble Lord will now answer any one of the three questions that I put to him, which so far he has not answered at all.

§ Lord Young of Graffham
My Lords, my understanding is that I have answered two at the most. Since I have been unable to make up my mind which two of the three, I have decided to pass.

§ Lord Whaddon
My Lords, will the noble Lord accept congratulations from these Benches regarding the statistical competence of his department? He has been able to inform the House that 9 million people out of 60 million are shareholders, whereas his noble colleague could not give us any figures. Will he therefore consider taking over the statistics for that department?

§ Lord Young of Graffham
My Lords, I seem to recall a time when I had a certain reputation for statistics, and I have no wish to re-invent that.

§ Lord Glenamara
My Lords, why does the noble Lord take such pride and boast constantly about depriving all the British people of their ownership of 1622 the large public utilities and limiting ownership to a relatively small number of people?

§ Lord Young of Graffham
My Lords, I look at the progress that these public utilities have made since denationalisation and I take great pride in that.