If he will make a statement on his policy regarding the savings ratio. [154601]

What recent representations he has received on the taxation of savings. [154605]

The Government's strategy involves creating the right environment for saving—sound money and low inflation—the right incentives for people to save and ensuring that people have the right information to make good saving choices.

But the Chief Secretary obviously does not know that in 1995 the Chancellor wrote: We will never raise the level of investment in our economy if we do not encourage savings", yet in the past four years the savings ratio has been almost halved, so does the Chief Secretary think that the Government's policies are encouraging savings? They certainly do not seem to be.

The answer to the hon. Gentleman's question is that of course investment is increasing; it is now almost 15 per cent. of GDP. As for the savings ratio, that is increasing as well. The hon. Gentleman obviously did not see the latest figures which were released on Monday and showed that the savings ratio is up to 5.5 per cent.

Will the Chief Secretary admit that, despite what he has just said, and as figures that I have show, the savings ratio is as low now as it has ever been since records began and that the Treasury itself admits that any further weakening of savings would pose a serious risk to the United Kingdom economic outlook? Does he think that taking —200 annually, in the form of the Government's pension tax, from the average 30-year-old encourages or discourages savings? Surely we want to encourage savings, and that is what the Conservative party is going to do.

I am surprised that the hon. Gentleman has not checked his facts more carefully. As I said and as the figures published on Monday showed, the savings ratio has increased to 5.5 per cent. Moreover, in every quarter under this Government, the ratio has been higher than the depths that it reached, in 1988, under the previous Tory Administration. Furthermore, since the previous General Election, personal sector net financial wealth is up by 31 per cent. We also have robust levels of long-term saving in the economy. The debt-to-wealth ratio is less than half of what it was in the 1990s, and individual savings accounts are attracting one third more in savings than TESSAs and PEPs were even in their most successful year.

But is it not a paradox that, although the United States is the zone with a negative savings ratio and Europe is the zone with a positive savings ratio—the European ratio is more positive than ours—Conservative Members are fanatically anti-European? Is not one of the best ways of encouraging saving to allow employees to have a stake in their company through employee share ownership? After the General Election, when he and every other Labour Member have been returned, will my right hon. Friend meet a delegation to take forward the idea of employee share ownership? A stakeholding, partnership economy is the one that we want—not the confrontational, anti-European one being offered by Conservative Members.

Of course my hon. Friend is right. This Government have introduced the most ambitious and successful programme for employee share ownership that the United Kingdom has ever seen. I shall be very happy to meet a delegation at any time to discuss how we can build on that successful programme.

Does my right hon. Friend agree that, prior to 1997, great numbers of people in the United Kingdom were excommunicated from savings? Will he comment on the viability of credit unions and the contribution that the Government have made to establishing those programmes in our communities?

Yes, given the damage of boom and bust and instability and the 3 million unemployed, Conservative Members should be ashamed of their record when they were in government. As my hon. Friend said, that Government threw people on the scrap heap and did not give them an opportunity to save. As for credit unions, they make an invaluable contribution, and we are pleased to see the credit union movement growing. We are simplifying the regulation of credit unions and enabling them to expand their activities. That is greatly to the benefit not only of saving, but of people in our most disadvantaged communities because it gets them out of the hands of the loan sharks.

Does the Chief Secretary accept that the halving of savings—which is the halving of the savings rate, of which the Government are Well aware—has been the result of Government policies and presents a serious threat to the economy? As Ministers know, there has been a substantial increase in personal borrowings because disposable incomes have increased by only 1.6 per cent. annually whereas, in the previous decade, they increased by 2.75 per cent. annually.

Do the Government not see, in the present climate of stock market weakness, that there is a serious risk of a volatile rise in savings, leading to a fall in consumption and the very bust that they seek to avoid? We are dangerously poised, as a result of the—

Order. We must have brief questions, as well as brief answers

I find it extraordinary that the hon. Gentleman is predicting a rise in the savings ratio, when Conservative Members have been complaining endlessly that it was too low. The truth is that the best prospects for savings, as for the strength of the economy as a whole, is to maintain the platform of stability that the Government have put in place and avoid the £16 billion worth of cuts and the boom and bust threatened by Conservative policies.