Saving Gateway Accounts Bill

I shall also speak to Amendment 5. The amendments refer to eligibility for a saving gateway account. Amendment 2 would delete Clause 1(3)(b) which states that the relevant date for a notice of eligibility can be earlier than the date that the notice is issued if the person concerned has already ceased to be eligible. If the person was eligible for, say, jobseeker’s allowance but then got a job and came off JSA without going on to any other benefit or tax credit, the HMRC could nevertheless issue a notice of eligibility allowing that person to open a saving gateway account. In Committee in another place, the Minister said that that was indeed the Government’s intention and that even a fleeting encounter with the benefits system would create eligibility for a saving gateway account. The noble Lord, Lord Newby, spoke on Second Reading about the opportunities available to young people from wealthy backgrounds. They could register for JSA, get their saving gateway entitlement which their parents might fund and then leave JSA either because they got a job or because it really was too boring to do all those job interviews. Stakeholder pensions were a policy failure in providing pensions for those without workplace pensions, but they became a very big hit with the middle classes, which could see the tax advantages of taking out stakeholder pension accounts for non-working spouses. It was simply an opportunity that was too good to miss; and the concern is that a saving gateway account may be too good an opportunity to miss. Amendment 2 would not allow the HMRC to issue a notice of eligibility if the person concerned had already moved out of eligible benefit or tax credit. Amendment 5 has a similar purpose. It modifies Clause 2 so that the expiry date of a notice of eligibility must be no later than the cessation of eligibility. Even if a notice had been issued to someone who was receiving one of the benefits, it could not be used after the person came off benefits or tax credits. That would further restrict the possibility that people who are not really on benefits would qualify. In Committee in another place, the Minister said that allowing a saving gateway account to those who no longer qualified affected only around 4 per cent of the eligible population. I suspect that that makes no allowance for the behavioural effect of encouraging people to register for a benefit only for the purpose of gaining access to the tax-free return that the saving gateway account will allow. I can see no possible reason for the saving gateway account scheme to encourage that sort of behaviour, and the scheme should not allow it to occur. The Minister may say that it is very difficult, because DWP will be transferring information to the HMRC only once or twice a month, so the system cannot cope with short-term shifts in eligibility. That has to be a weakness of either systems or processes that are being set up to cope with the new scheme or, to return to the theme of my earlier amendment, with placing responsibility with the HMRC rather than DWP, which is very used to handling short-term changes in the circumstances of individuals. I have already argued it is the more logical place for administration to be located. I beg to move.