Industrial Shares (Wider Ownership)

Part of the debate – in the House of Commons at 12:00 am on 24th June 1960.

Alert me about debates like this

Photo of Mr Edward Du Cann Mr Edward Du Cann , Taunton 12:00 am, 24th June 1960

I accept that point. I have always felt that one of the essential factors in any drive to increase share ownership is that every man should have first-class advice and all facilities at his disposal. I am merely suggesting that the arrangement of a unit trust—I seem to be led continually into dis- cussion of unit trusts—is that the unit trust has in fact provided these services for him. It is a matter of argument whether it provides them to a sufficient or insufficient degree, but it provides them to some extent, and, I think, to a satisfactory extent.

I believe that there is a tremendous scope for increase in the total volume of share ownership. We have heard a lot of figures, and I am not clear about some of them or the sources from which they have been derived, but I have details of a Gallup Poll, not generally published, which I should like to quote to the House.

According to a recent survey, only 9 per cent. of the persons questioned had any direct interest in share ownership and investment. Thirty-two per cent. who replied to the sample questions had no savings at all. Those two figures, taken either separately or together, show how far there is to go. Indeed, what can be done in this field is shown by American experience. I have in my hand the annual report for 1959 of the New York Stock Exchange, which states that the number of individual shareholders in the United States grew from 6½ million in 1952 to 12½ million in 1959. In counties, so to speak, like the district of Columbia 14 per cent. of the population were shareholders. In the city of Pittsburg it was 17 per cent. I have probably said enough, without going into more figures which I have here, to show that the scope is enormous.

I agree with what other speakers have said when they have talked by inference about the current economic situation. I frankly wonder why everything that the Government do in times of economic crisis must be repressive and negative. I believe much more in the positive approach, and I hope that we shall see more of it as time goes on, and not least as a consequence of this debate.

I should like to say a word about the rôle of the Government in this matter with reference to the Motion. First, it must be the responsibility of the Government to set standards, and to set those standards high. We suffered from certain scandals in the financial world, notably at the time of the General Election, and the Prime Minister gave a pledge, which was reinforced by other speakers on behalf of the Conservative Party, that action would be taken. I pay tribute to the way in which the Government have taken action. We have building society legislation, we have the Jenkins Committee sitting at the moment receiving evidence on the 1958 Act, and new rules framed by the Board of Trade for takeover bids and so on.

The rôle of the Government must be not necessarily to control in minute detail the day-to-day activities of those attempting to do a good job in this field, but to set standards and, in particular, to be always ready to crack down on the spivs and the cheats. I am glad to see that the Government are living up to that important responsibility.

The second responsibility of the Government, I am not so happy about. The Government, I feel, have a direct responsibility to give practical encouragement, and I suggest that there are certain direct forms that practical encouragement should take. First, I think that it is clear from all that has been said both on the Finance Bill and this morning that it is high time that general concessions to the savings media should be rationalised. It is quite absurd that there should be concessions for assurances of one sort or another and concessions to the National Savings Movement—very valuable concessions—but that the co-ops, the unit trusts, the hire purchase companies and everyone else should be totally ignored. If one has a family of five children—at least I think so, being a bachelor—one does not give sweets to two of the children and not to the other three. One soon learns how absurd is a system of that sort. I hope that the Government will pay very serious attention to this point. The criterion must be fairness, and the present situation is not fair.

A valuable suggestion was made that the first £15 of interest in any form of savings should be free of tax. Why not let the individual choose his savings media for himself? Why do the Government appoint the various media? Do the Government think that life assurance is better than building society investment, for example? They are in the invidious position of apparently having made the choice. It does not seem to me to be appropriate.

The next point in which the Government could help lies in the field of taxation. I warn my hon. Friend the Economic Secretary, for whom I have every feeling of affection and regard, in advance, that I have extremely strong feelings on this subject. I believe that not only is taxation too high but that to some extent its moral purpose is totally unclear. The man or woman who works hard and honourably during life is heavily taxed. If a man saves from his work, he may get a few paltry and, on the whole, derisory concessions, whereas those people who make a living in less morally defensible ways by betting, gambling and capital transactions of one sort or another get away scot-free. That cannot be right. In effect, our policy is an attempt to tax the virtuous and to let the vicious go free. Again that cannot be right.

I ask my hon. Friend, in all seriousness, what it is that he is trying to achieve through the taxation system, because it is not clear to me, and I believe that it is not clear to the country as a whole. I believe that many people in the country are dissatisfied by this general state of affairs of which there are innumerable examples. Take the case of a married couple living together and both working. As every Member of the House knows and almost every member of the public knows, it is better for them from a tax point of view if they live in sin.