Individual Savings Accounts: AIM Shares

Lord Peston Excerpts

Tuesday 31st January 2012 Lords Chamber

[Lord Sassoon]

My Lords, this is a Question that we come back to on a regular basis and my answers are going to sound boringly repetitive. I see the noble Lord, Lord Myners, in his place. He answered this Question in the dying days of the previous Government. The simple fact is that the ISA is a trusted brand in which more than 23 million adults—45 per cent of the adult population—hold shares, and we need to protect that trusted brand and the suite of products within it. On the other hand, the Government have taken a range of measures to support small businesses. In relation to SIPPs, the liquidity requirements of an ISA with a 30-day withdrawal period, in particular, are very different from what might be the case when locking up shares for the long term in a pension savings product.

[Lord Peston]

My Lords, I think that I understand the noble Lord’s answer but surely the main criterion that ought to be applied to ISAs is: do we have a system that maximises people’s propensity to save using ISAs? If it can be demonstrated that the Alternative Investment Market will do that, even if it is more risky—and, incidentally, people ought to know that all investments are risky—surely it still makes sense for the Government to widen the range of assets, assuming that that encourages people to save.

[Lord Sassoon]

My Lords, I am very happy to confirm that ISAs have indeed been a very successful product. As I said, 45 per cent of the population over the age of 16 hold them. On the latest numbers that I have seen, the total value of ISAs is £350 billion. It was a successful initiative of the previous Government. It is the main savings product of a large part of the population and we should not do anything to undermine the value of that brand.