Saving Gateway Accounts Bill

I understand the concern behind these amendments; the noble Baroness voiced them in moving the amendment and the noble Lord, Lord Newby, did so in returning to a theme that he strongly expressed on Second Reading. The scheme has been designed with the aim of securing exactly what the noble Lord said—national provision, but provision over a broad range of appropriately authorised providers. The saving gateway pilots showed that distance from a branch was a key issue. That means that we have to engage the concept of national providers, as has been demonstrated by the two representations made in this short debate. Ease of access is a very important dimension. The Government have therefore sought to make the scheme as simple as possible for providers to operate. I recognise that simplicity reduces costs, but it does not remove them. The noble Baroness identified the obvious fact that relatively low sums will accumulate and there will probably be a significant number of transactions. However, the intention is that all providers which have the appropriate regulatory permission and are able to offer accounts that meet the requirements set out in the Bill and in regulations will be approved as account providers. The gentle charge was made that my noble friend Lord Myners was complacent—I think that that was the word used. My noble friend is of a cheery disposition, so I think that it was optimism rather than complacency. It is not a question of being complacent about a scheme that is being set up. There is a great deal of work to be done and the Government are involved in a considerable amount of work. My noble friend was reflecting confidence. We expect saving gateway accounts to be offered by a range of providers—not just banks and building societies, but also credit unions. We are discussing this with potential providers and their representative bodies and are getting a positive response. Reference was made in the other place to the views of representatives of the banks, building societies and credit unions, which indicate that broadly they want to be involved. We consider our discussions thus far to be making considerable progress. I am not in a position to name names because discussions are still continuing. As the noble Lord, Lord Newby, hinted when he talked about banks having community responsibilities, the banks have social responsibility agendas to which they subscribe and this scheme fits into that general prospectus. In the past, they have committed themselves to issues of social responsibility and an inclusion agenda. After all, we have seen the banks involved in other areas. Only a year or so ago we discussed dormant accounts legislation, which also showed the banks in a constructive light on the work that needed to be done to release resources into the community. If it is thought that perhaps I am stressing too much the marginal commitments of the banks against the large problems that they currently face, it is also the case that providers will be able to capitalise on the saving gateway account holders who continue to save and will build up rather significant balances. Some will make progress and the banks will have the advantage of being responsible for their accounts, which is of potential advantage to them. The person in the category of obtaining this level of opportunity at one stage may, a decade on, be in a very different financial position. We all know the extent of loyalty of customers to banks, even when they are not treated particularly well, which is legendary. If banks set out to provide a service that is not necessarily profitable in the first instance they must have greater expectations among those of their customers who move into more prosperous circumstances. It is not as if we are asking them to take on a total loss leader. Reference has also been made to the Post Office, which also has issues to discuss. It has a great advantage in terms of its range of branches. I cannot give a categorical response at this stage on how far on we are, but we are confident that these accounts will be serviced. The Government will be very active to ensure that the legislation is effective, and the Committee will recognise that it can only become effective on the basis of the co-operation of those that can provide such services as have been identified in the amendments. It is not an issue of complacency; it is a reflection of the fact that considerable work still needs to be done. We are making very considerable progress and we have confidence in the fact that we will have providers that meet the criteria, identified by both noble Lords in speaking to the amendment, to make the scheme successful. I hope, with those reassurances, that the noble Baroness will feel able to withdraw her amendment.