Sunday 1 September 2013

Defending savers: an email to Peter Hitchens

Dear Mr Hitchens

I'm glad you're taking up the cudgels for savers. You may (I hope) be interested to know that when NS&I ILSC were first introduced in 1975, both the Government and the Opposition explicitly accepted that there was a moral obligation to savers to protect them from inflation, and with your and the Mail's resources you may be able to get more of the back story.

Here are two relevant Hansard extracts:

Hansard record of House of Commons debate, 10 July 1975:

Mr. Neubert

Does the Minister accept that the opportunity to invest in inflation-proof schemes is an act of belated social justice to millions of people who have seen their savings irreversibly damaged during the recent rapid rise in the rate of inflation? Will he make recompense to many of them by easing up on his vindictive attacks on the principle of savings embodied in the capital transfer tax and the wealth tax?§Mr. Barnett

The hon. Gentleman has put his supplementary question at the wrong time, because National Savings are rising very well at present. I am sure he will be delighted to hear that. As to what he called "belated social justice", I am sure he will pay due attention to the fact that the scheme was introduced by a Labour Government and not by a Conservative Government.Mr. Nott

Is the Chief Secretary confident that a further extension of index-linked schemes—which are welcome to savers—will not cause a diversion of funds away from deposits with building societies, leading to a rise in the mortgage interest rate?§Mr. Barnett

We are, indeed, aware of those problems. That is precisely why we introduced the scheme in this limited way.

Hansard record of House of Lords debate, 4 November 1975:


My Lords, does my noble friend agree that while the index-linked schemes are extremely good value for money, it would be a good idea—as inflation has been rather rampant—to increase the maximum amount that can be invested in them?

My Lords, the Government have two conflicting obligations. One is an obligation to the taxpayer to buy goods and services as economically as possible, and secondly there are certain social obligations. The Government believe that by the action they have taken they have got the right balance.


I have been trying for 447 days so far to get my MP (John Hemming) onside and so far I've sensed a definite reluctance to consider this issue important. When I gave him the above extracts (for the third time - I suspect he doesn't read his correspondence with sufficient attention) he very grudgingly said (by email, 22.07.2013) "I will ask [my researcher] to put these points to the minister with the suggestion that a small number of index linked bonds should be made available with a limit as to how much any one person can hold."
A further point:

You may have seen that on 9 August the Treasury announced retrospective changes to NS&I savings products held by savers, some of whom will now be very old and may even depend on them for funding care. The date of the announcement is suspicious, coming as it does in mid-holiday silly-season time. But the date that these changes are due to take effect is even more suspicious: Armistice Day 2013 - a good day to bury bad news?

It occurs to me that this apparently cynical choice of date could be effectively turned against the pocket-robbing spivs of the Government, since it may be possible to track down WW2 survivors who now hold NS&I products - do you think this could be worth a try?
If you'd care to glance through my attempts to get heard - and read the stupid, guff-filled and irrelevant responses from various Treasury ministers - please see below for the links to my humble amateur blog/magazine:

Part1 -
Very best wishes

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