Vol. 218 No. 5
asked the Minister for Finance if, in view of the estimated decline in small savings and prize bonds as set out in the White Paper on Public Capital Expenditure, he will in order to encourage greater savings increase the rate of interest in respect of sums in post office savings banks and other similar accounts.
3.
asked the Minister for Finance if, having regard to the substantial drop in small savings, he proposes to increase interest rates on accounts in the post office and Savings Certificates; and what measures he proposes to take to stimulate savings.
I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 2 and 3 together.
I am not satisfied that the increase in savings which might be expected to follow an increase in the interest rates of the savings banks would be commensurate with the heavy cost involved which would be approximately £1¼ million for each 1 per cent increase.
I am hopeful, however, that the increase from £25 to £50 of the tax free allowance on the interest paid by savings banks and commercial banks which was effected in this year's Finance Act, will prove a useful stimulus to savings.
The return on the National Loan which I shall be announcing tomorrow should also be a stimulus to saving in this form.
Meanwhile, I have set up a working party to review existing arrangements for encouraging savings and to examine the possibility of improving them. The working party consists of representatives of the Central Bank, the Irish Banks' Standing Committee, the Trustee Savings Banks, the Savings Committee and the Departments of Industry and Commerce, Posts and Telegraphs and Finance.
Could the Minister say is the change from £25 to £50 the only new incentive proposed to encourage saving?
The committee are seeking new incentives and will report to the Minister what they consider to be useful incentives.
Considering the delay which is likely to occur in getting a report from a committee of this sort, does the Minister think this is a quick enough method to encourage saving?
If there were any obvious incentives, they would be used right away, but there does not seem to be any obvious useful incentive.
Increase the interest rate.
Would the Minister not agree there is no radical concession to the small saver in the concession he has just announced?
That does not mean one should not do it.
By all means, the Minister should do it, but——
This is what the committee are investigating. The committee have been asked to find ways.
The Minister should reconstitute the committee, I think. This is no good.
