National Savings

Part of the debate – in the House of Commons at 12:00 am on 10th December 1965.

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Photo of Mr John Biffen Mr John Biffen , Oswestry 12:00 am, 10th December 1965

The hon. Member can debate R.P.M. with me on another occasion. I shall be delighted to take part in such a discussion. The case that I am putting is that if there is a rise in consumption at present it is important that it should now be deferred by a rapid and substantial increase in personal savings. The conclusions of this situation have been put more eloquently than I could attempt to put them by the Economist. On 4th December it said, first: If Mr. Brown's threats of bad publicity to those who raise prices have held down consumer prices by even 1 per cent. since April, they will have added an annual rate of more than £200 million to effective consumer purchasing power, which now totals well over £20,000 million a year. They will thus have temporarily wiped out the anti-spending impact of Mr. Callaghan's £165 million of new indirect taxes last April plus a good part of the consumer impact of his November increase in Income Tax as well. Secondly, it said: If we have really returned to a situation, so far as consumer demand is concerned, where the last budget might never have existed, it would obviously have been better that it never had existed; as it is, the monstrous burden of taxation has been pushed a little nearer to its maximum possible limit, and we have gained no advantage from it. I would not wish to have a more eloquent testimony to the so-called success of the Government's income policy than that.

In this tragically serious situation only a high level of personal savings can prevent a possible drift towards another period of speculation against sterling and all the horrors of a balance of payments crisis with which this country is all too familiar. I therefore ask whether we know how the level of personal savings is moving. Can the Financial Secretary tell us that all is well? He may say that I have quoted dreary and damning figures. But can the Minister say that all is well with the rate of savings, and that personal savings remain high, quoting "Economic Trends" and tables shown in the Blue Book on personal savings? Can he do that with any certainty? The answer is, "No." Of all the statistics published by the Government the phoniest are the statistics of personal savings. That is why we are all in a fog in this debate. It is not a very pleasant situation to be in if one believes that the boat is going near the rocks and one's navigational aids are primitive. It is indeed a position in which one is well excused for sweating a little.