We thank the Parliamentary Secretary for his very agreeable, able and clear exposition of the Bill. We welcome it. We will help it if it needs any help, and we shall improve it if we can.
I think that even hon. Members on the Government side will probably admit that our attitude towards savings on this side of the House is not merely negative. If one goes to any Conservative meeting at election time, it will not be long before you hear a speaker say that our record as a party on savings is second to none. One would hear the usual figures, that in 1951 savings were £116 million and that by 1964 they had increased 16 times. We do not reckon that that is just sheer chance. We regard it as being due to the fact that we positively stimulated savings, not least by reductions in taxation.
The threat to the effect of the Bill does not arise through any fault in its mechanics. It will undoubtedly come from the fact that over the last year we have had a higher rate of Income Tax and higher taxes on all the people who normally save. It is rising taxes, rising prices, and the further rise in prices that everyone expects in the new year, that are likely to blow up in the face of the First Secretary and impede savings as the year goes on.
One has to judge this Bill by the extent to which it meets the changing needs of the modern saver, and I underline the word "changing", because his needs are changing. That is one of the reasons why the Bill is necessary.
After the war, my party made a great point of the theme of the property owning democracy. It did not seem to mean an awful lot in 1947, because people did not really believe that it would come. But the property owning democracy has arrived, and a much wider range of people now own property, not only houses but expensive and valuable things like cars, television sets, refrigerators, caravans and the rest.
Such a wide-scale possession of valuable property was simply not envisaged in those days, but it has come. It has come because people have more money, but it has also come because their needs have been met. The car manufacturers and television manufacturers have met and more than met the demand. They might even be said to have over-stimulated the property owning democracy.
The time has now come for a capital owning democracy. Owing to the rise in standards, people have a bigger surplus to save. But that surplus has not been matched in the first case by an increased savoir faire of the saver on how best to save his money, and it has also not been matched by any great increase in the facilities for saving. We have had the unit trusts, which have done a wonderful job of work and are increasing all the time. But, in spite of their increasing funds, the fact remains that only 9 per cent. of the population own shares. We have had the work of the Wider Share Ownership Council in the field which its title implies. In a very interesting survey that it has just made of the saving habits and wishes of the manual worker, it comes to the conclusion that on the whole he does not own shares not because he has objection to shares but because he has never simply thought of doing so. He puts his money into the Post Office Savings Bank, Premium Bonds and trustee savings banks, in that order.
To discover the needs of the small saver, we have to see what are the characteristics of that section of the public which the Post Office Savings Bank serves. The chief characteristic is a general ignorance in things financial coupled with a growing awareness of investment values.
One does not need to underline the general ignorance very strongly. It is one of the reasons for the success of the Post Office Savings Bank. Quite obviously, large amounts of money in the Post Office Savings Bank are not short-term savings. They remain there for a long time. If a person was really knowledgeable about where to put his money, he would not be content to draw 2½ per cent. on it. He would put it somewhere else.
One can also see ignorance in the success of the hire-purchase movement. Time and again one finds a person with money in the bank using hire-purchase. That is a poor bargain, for he is getting 2 per cent. below Bank Rate for his deposit in the bank, and he is probably paying teens of per cent. in interest on his hire-purchase contract. Similarly, anyone with overdraft facilities is stupid to use hire-purchase. A housewife will go a long way to save 3d. on a packet of Tide but, at the same time, she will not examine very carefully the conditions of her hire-purchase agreement. I do not think that I have to argue for very long to bring out the fact that there is a great unawareness of the disadvantages of hire-purchase facilities.
There is an increase in the movement of small savings, and one reason for the Bill is that deposits in the Post Office have been fairly static compared with the trustee savings banks. There has been a movement towards the trustee savings banks and, earlier in the year when we had a financial crisis, local authorities were offering high rates for short term loans and were getting money. The building societies are getting more and more conscious now that it really matters what percentage they offer on their savings money, which flows in and out in relation to their interest rate. There is a growing body of the public which knows a good return when it sees it. The object, therefore, of the Post Office Savings Bank should be not to outbid the existing media which go for the savings of middle-class people who are well served by stockbrokers and banks, but to give a better service, and in fact provide a better bank, for the category of saver about whom we have been talking. The first feature of a better bank is a better return, or at any rate an appropriate return, and that is what the Bill offers.
Reverting to what I said about ignorance and awareness, the next thing that a bank should offer is information. I know that if there are 20,000 or 21,000 outlets, it is impossible to provide advice at every source. One knows that the person who runs a small sub-post office is not in a position to give financial advice, but, on the other hand, I think that something could be done. I live in the small village of Sawdon, which has 184 inhabitants. I would not expect advice from the local post office there, but would not it be possible to have advice available in, say, Scarborough? Could not there be a Post Office there to which people could go for a modest degree of financial guidance? There are only about half a dozen ways of saving open to the sort of people about whom we are talking, and the information could be given either personally or in leaflets.
If advice is going to be available, what is the service of this bank going to be like? It will be necessary to have separate counters. When it comes to investments, people want to talk about what they are going to do, and they want a little privacy. At the moment, owing to the staff problems of the Post Office, one's vision of a post office is the shutter up at two desks, and possibly queues at the rest. I happened to do a radio broadcast last night. Sir Robert Shone, who was on the programme, talked about the possibilities of future savings, about unit trusts administered by the Post Office, and possible contractual schemes, and so on. This may be good, bad, or indifferent, but how can the Post Office cope with it? This is a genuine worry about which we want to know more in respect of the Bill.
The House may think me somewhat ungrateful in throwing any doubts on new ideas because for the party opposite either to have or to welcome new ideas for savings is fairly novel. One throws one's mind back to the days when Premium Bonds were introduced. The present Prime Minister welcomed the idea by calling it a squalid raffle. He is always a sensitive man, and at the time he said:
I believe this proposal will offend a great number of our people on sincerely held religious and moral grounds.
However, he is now in power. In those days he called it a candy-floss bingo
society. Now his "sincerely held views" have evaporated, and Harold, the Bingo King, has upped the jackpot to £25,000, and good luck to him.