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As a body, National Savings and Investments accounts for a considerable amount of public savings outside of property and the pensions sector. According to the latest estimate from National Savings and Investments, which I obtained today to get the most up-to-date figure possible, it currently has some £68.7 billion under management. That includes a variety of products, of which some of the best known to
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Members of the House and the public would be premium bonds, national savings certificates and income bonds. A rough breakdown is as follows: £26.8 billion is currently invested with National Savings and Investments in premium bonds, which is a very considerable amount of money; £17.1 billion is invested in national savings certificates; and some £7.6 billion is invested in income bonds. Moreover, given the nature of National Savings and Investments business, the vast bulk is held by private individuals rather than by financial institutions, pension funds or banks. [Interruption.] The Minister says from a sedentary position that that is what worries him. I think that in some ways the change in regulation worries us too.

Several million people hold these products, so the change potentially affects a considerable number of the constituents of every Member. It is right and proper for those people to be given an adequate level of protection for their money, not least because they are effectively lending it to the Government. The Government undoubtedly need that money. Given the present fiscal position, it seems likely that the Treasury will become even more reliant on National Savings and Investments over the next few years, not least as a device with which to seek to ameliorate the effects of the Chancellor's burgeoning black hole in the public finances. A host of independent economic commentators—[Interruption.] Ah, Labour Members have woken up. The Organisation for Economic Co-operation and Development, the International Monetary Fund, the National Institute of Economic and Social Research and the ITEM Club all agree that the Chancellor now has a structural deficit of between £8 billion and £12 billion in the public finances. Furthermore, the situation is deteriorating rather than improving.

The Chancellor increasingly needs the money provided by National Savings and Investments because the projections for the deficit have increased by some £6 billion since the last Budget alone. He is now projected to run an overall Budget deficit of some £34 billion this year. Over the next five years combined, that amounts to a massive £168 billion of expenditure over revenue, even if we do not include all the off-balance sheet debt of which we heard earlier this evening.

The Government are therefore likely to look increasingly at National Savings and Investments to try and help shore up the public finances, which all the economic commentators agree are in trouble. Let me give just one example of what National Savings and Investments is trying to do. The limit on premium bonds that can be held by a single individual has been increased from £20,000 to £30,000 to encourage extra purchases, although the odds on winning the £1 million jackpot have been reduced. Over the last three years, the amounts invested in premium bonds have increased fairly significantly. In May 2003, £20.9 billion was invested in them; today, the figure is £26.8 billion. That is a significant increase over three years, given that the product has been running for decades. The drive for extra investment by National Savings and Investments on behalf of the Government is clearly already well under way. I think we can agree on that beyond peradventure.

The current National Savings and Investments literature also makes a virtue of having an independent complaints procedure as part of the sales pitch. I have
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here a copy of the booklet produced by the Government to try and market these products to the public. I went to considerable lengths to obtain a copy: I picked it up from the post office in Central Lobby on Friday. Under the heading "Our commitment to you", the booklet says:

That point is part of the marketing test in the booklet. It is not tucked away in 8-point type at the end under the "Terms and conditions" heading. It is not part of the small print; it is part of the sales pitch itself. So the Government have been relying on—playing on—the fact that they have an independent arbitration scheme to help sell these products to members of the public, including those who might frequent the post office in Central Lobby, even though the changes in the regulation of these products will be introduced in less than three months from today.

10.45 pm

There is also the related issue of double standards. Via the Financial Services Authority, the Government have sought to foist compulsory compliance rules on a whole plethora of financial institutions, to the point where it has led to quite a falling out behind the scenes between the Prime Minister and the Chancellor. So there is absolutely nothing new there, but it is a bit rich that the Government want compulsory regulation for just about everyone else—including most building societies, banks and investment product providers—yet when it comes to people who are effectively lending money to them, suddenly, a weaker voluntary code will do nicely. Where is the level playing field in all this?

The Government's consultation document on the proposed change included a key sentence, which states that moving responsibility for adjudication from the statutory adjudicator to the Financial Ombudsman Service

the Financial Services Authority. That being the case, perhaps the Minister will have more to say tonight specifically about those revisions and exactly what they will include, so that all Members of this House, and all members of the public who want to continue to invest in National Savings and Investments, can hear exactly how those changes are likely to be implemented. [Interruption.] As I speak, inspiration is arriving from afar. I am pleased to see that the Minister will be suitably briefed, even if he was not before he arrived.

As Ministers know, we Conservatives have commented on the sometimes heavy-handed nature of the FSA.

David Taylor (North-West Leicestershire) (Lab/Co-op): Unless I have missed something, the thrust of the Opposition's criticism of the Government's financial strategy in the past 12 to 18 months has been that the savings ratio has been declining. Now that it is starting to climb again, the Opposition are criticising that as well. Where is the logic in that?

Mr. Francois: I congratulate the hon. Gentleman on participating in this debate. We have been waiting for
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hours for a Labour Back Bencher to make a contribution. Now that one has finally put his head above the parapet, I must congratulate him on reinforcing the Government—after almost five hours of absence of comment from their own Back Benchers. I am not absolutely sure that the savings ratio is recovering in the way that the hon. Gentleman—

The First Deputy Chairman of Ways and Means (Sylvia Heal): Order. This is not strictly relevant to the amendment that we are discussing. Perhaps I might suggest that the hon. Gentleman avoid straying too far from it.

Mr. Francois: I thank you for that guidance, Mrs.   Heal, and I will of course abide by it. The hon. Gentleman's contribution was the only one from the Labour Back Benches in five hours, and I confess to having been tempted to respond to it; nevertheless, I shall not be so foolish as to argue with the Chair. Perhaps the hon. Gentleman and I can discuss this issue some other time.

If our constituents lend their hard-earned money to privately run banks or building societies, they have some protection from compulsory jurisdiction under the auspices of the FOS, but if they lend to the Government instead, that protection is only voluntary. How is that equitable? Why are Ministers always so willing to encourage tighter regulation—except, of course, when that regulation might apply to them, when suddenly they are in favour of a lighter touch?

Unless Ministers are going to announce this evening that compulsory jurisdiction in these areas is suddenly to become voluntary across the board—I very much doubt whether they will—it is for them to justify the anomaly whereby a potentially lesser standard of protection is acceptable for our constituents, who are effectively lending to them. That makes it all the more important to have effective protection for individual savers against a financially avaricious Government such as the present one. If Ministers cannot justify the position clearly and to the satisfaction of the House and the country, I urge them to accept amendment No. 37 in order to remove the anomaly once and for all.

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