Opposition Day — [1st Allotted Day] — Savers — 21 Jan 2009 at 18:49

I beg to move,

That this House recognises that the reduction in interest rates since October 2008 has been a necessary policy response to the recession, justified by the dramatic reversal of inflationary pressures; believes that the role of Government in a recession is to support those most affected in the short term, while strengthening the economy for the recovery; notes that lower income savers have suffered significant losses as a result of interest rate reductions, and are likely to have a high marginal propensity to spend any increase in post-tax income; further notes that older savers, in particular, are a group who have acted responsibly during the so-called age of irresponsibility, and should be rewarded rather than penalised for their thrift; acknowledges the decline in the savings ratio from 9.9 per cent. to 1.8 per cent. since the second quarter of 1997; believes that more needs to be done to promote a culture of saving during the period of recovery and end Britain's addiction to debt; and calls upon the Government, in the next Budget, to cut taxes for savers by reducing the starting rate and basic rate of tax on savings to zero, paid for by reducing the real growth rate of Government spending in 2009-10, as the Government has already committed to do in 2010-11.

I beg to move an amendment, to leave out from "House" to the end of the Question and add:

"recognises the effects the global financial instability is having across the world and on the UK economy; notes that, as a result of Government action on financial stability, no individual depositor in a UK financial institution has lost savings; notes that the cut in value added tax, increased child benefit and £60 payments to all pensioners are helping families and businesses across the UK; further notes that 60 per cent. of pensioners pay no tax at all; believes savings are important in providing people with independence and security throughout their lives; welcomes cross-party support for the Saving Gateway Accounts Bill to help those of working age on low income; believes that the Saving Gateway will build on the successful pilots since 2002 to create savings accounts with the Government matching each pound saved with a contribution; notes that around eight million people on benefits and tax credits will be eligible for this incentive to save; further recognises the successful role that Individual Savings Accounts have played over the last decade with over 18 million people, including one in five people from low-income groups, choosing this method to save tax-free; welcomes the fact that four million children now have child trust funds and millions more will benefit in future; and notes that the Government contribution to child trust funds increases to £500 both at birth and age seven for lower income families."

The House having divided: Ayes 162, Noes 364.

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