Saving Gateway Accounts Bill

This group of amendments tries to address one of the issues that the hon. Member for Taunton (Mr. Browne) mentioned on Second Reading, which is the fact that the Bill is an enabling Bill and contains a large number of regulation-making powers. I think that he said that there were 29, and virtually every clause contains at least one regulation-making power. The Government have already published some draft regulations, and the amendments try selectively to enhance the parliamentary scrutiny of the regulations. I accept that there are circumstances in which the negative resolution is the appropriate route, when matters are relatively uncontentious, but I have suggested a number of areas where I felt that the affirmative procedure might be more appropriate given the implications for the taxpayer of changes to some of the criteria in the Bill. First, let me deal with amendment 2. Clause 6 is about eligibility and it talks about people being able to open a savings gateway account having received the notice of eligibility. When we discussed the clause in Committee, there was some discussion of the regulations under subsection (5), which are very permissive and enable people to have more than one savings gateway account at any one time or more than one over their lifetime. They also restrict the number of savings gateway accounts that someone might have. We know that the intention of the Minister and the Government is that people should have only one savings gateway account and that was the consensus that was underlined in Committee and in the evidence-taking sessions that we had before the Committee scrutinised the Bill line by line. Sharon Collard and Brian Pomeroy, among others, made it clear that if people have not got into the savings culture through one account, it is unlikely that being offered further opportunities will enable them to develop the habit of saving. Amendment 2 proposes that once the Government have made their first regulation to limit accounts to one per person, there should be a proper consultation if they seek to make any subsequent changes. The consultation should consider whether there should be more accounts and a copy of it should be laid before the House before any further regulations are made, to ensure that the House is aware of the outcome of the consultation before it is made. Amendments 7 and 8 refer back to clause 14, which gives the Government the power to make regulations for the treatment of the accounts in the context of income tax and capital gains tax. Again, the Government’s intention is that the accounts should be free from income tax and capital gains tax. However, the Bill states that although the first regulations made under the clause will be subject to the affirmative resolution procedure, any subsequent changes will be made under the negative resolution procedure. Given that subsequent changes could make accounts subject to income tax or CGT, it is appropriate to build in a safeguard requiring proper parliamentary scrutiny, so that any subsequent orders would be made by the affirmative rather than the negative process. Amendments 9 and 10 deal with other parts of the Bill that allow changes to be made by the negative procedure. Clause 4 is important, as it determines the maturity period that applies to savings gateway accounts and the maximum amount that can be paid into an account. The draft regulations published by the Government set the maturity period at two years and the maximum monthly payment at £25. Any amendment to those terms would be made by the negative procedure, but lengthening the maturity period could lead to increased costs to the Exchequer as people build up higher balances that would be subject to the 50p in the pound matching process. Similarly, increasing the monthly payment from £25 to, say, £30 or £40 would also lead to increased costs to the Exchequer. We believe that both processes should be subject to the affirmative rather than the negative procedure. That is a reasonable extension of the affirmative procedure, and it would provide some safeguard for taxpayers. Amendment 10 makes a similar point in connection with clause 6. In amendment 2, we ask that a report be laid before Parliament when the Government propose a change to the number of accounts that can be held. In amendment 10, we argue that any subsequent use of the power after the first use should be subject to the affirmative rather than the negative procedure because, again, the cost to the Exchequer will be greater if the rules are modified to allow people to hold more accounts.