National Savings

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 21st April 1970.

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Mr. Edward M. Taylor:

asked the Chancellor of the Exchequer what was the total net increase in National Savings in the financial year 1969–70; and what were the comparable increases in 1964–65 and 1959–60.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Acton

asked the Chancellor of the Exchequer by what amount National Savings declined in the last financial year.

Photo of Mr David Howell Mr David Howell , Guildford

asked the Chancellor of the Exchequer whether he has received the final figures for the movement of National Savings in 1969–70; and whether he will make a statement.

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

Provisional figures for the financial year 1969–70 show a decrease of £103 million in National Savings. In 1959–60 and 1964–65 there were increases of £378 million and £320 million respectively.

Mr. Taylor:

Are not these figures utterly deplorable? Do not they demonstrate that the investing public has no confidence in the Government's ability to restrain rising prices? In what previous year have the National Savings figures been quite so bad?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

The answer is a little more sophisticated than that. We all recognised that in conditions of consumer restraint it was likely that savings would fall. In any case, there has been very sharp competition from other institutions which receive savings, and some of this flow has been desirable. There are fluctuations from year to year. But, for example, in 1951–54 there was a fall of over £130 million.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Acton

Is not the root cause that since 1964 the value of the £ has fallen to 15s. 1 ld.? In those circumstances. why should anyone bother to save?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

This is certainly not the root cause. I ask the hon. Gentleman to wait and see what happens over a period.

Photo of Mr David Howell Mr David Howell , Guildford

While the Minister may make excuses, I am sure that he will agree that there has been a sad decline in National Savings. Is it not time, rather than making marginal adjustments, to have a radical re-examination of the whole institution and machinery of National Savings particularly, for instance, the Department of National Savings with its 15,000 civil servants? Would not less bureaucracy mean a better deal for the small saver?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

The hon. Gentleman makes a more thoughtful contribution to the question than some of his hon. Friends. Certainly we must examine the National Savings position from time to time. The House will know the proposal made by my right hon. Friend the Chancellor in his Budget Statement, which will be helpful.

Photo of Mr Paul Rose Mr Paul Rose , Manchester, Blackley

Does my right hon. Friend agree that it seems rather hypocritical for some hon. Members opposite to stimulate unit trusts and at the same time attack him over National Savings?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

The inconsistencies of statements by hon. Gentlemen opposite are very many, and this is certainly one.

Photo of Lieut-Colonel Sir Walter Bromley-Davenport Lieut-Colonel Sir Walter Bromley-Davenport , Knutsford

Can I have a straight answer to this question please? Is it not a fact that when these bogus National Savings Certificates mature in seven years' time they are worth less than the original investment due to the fall in the value of money? Can I have a straight answer?

Photo of Mr William Rodgers Mr William Rodgers , Stockton-on-Tees

The straight answer is that the hon. and gallant Gentleman, as always, makes simple what is a very complicated calculation.