Saving Gateway Accounts Bill

Amendment 20 seeks to amend Clause 4 and, like my previous amendment, adds another matter to which HMRC must have regard in approving account providers. The amendment requires HMRC to have regard to the desirability of eligible persons having access to financial information regarding savings. This is a very modest requirement and does not require HMRC to approve account providers only where the account providers agree to provide basic financial education about savings. In the light of the discussion we have just had, that simply might not be feasible. At Second Reading, the noble Lord, Lord Newby, asked the Minister for an update on the Thoresen review and its proposals regarding generic financial advice. The Minister’s written reply, to which the noble Lord, Lord Newby, has referred today, showed that that this has not got very far at all, which is what both the noble Lord and I suspected. There is a large-scale pilot scheme in the north of England but, as the noble Lord, Lord Newby, has already said this afternoon, there is a long way to go before there is anything meaningful on a national scale around financial advice or even information. As I said a few moments ago, there is still no clarity about how that would be financed and paid for, if it were rolled out on a national basis. I am sure that the noble Lord, Lord Newby, and I both wish the Thoresen proposals well, but it is not clear that they will finally end up with proposals that would ensure that the kind of target groups that we are dealing with in the Bill would have access to financial information and financial education. Without some level of financial information to reinforce the savings habits that are supposed to be acquired through the saving gateway scheme, it is quite likely that account holders will not acquire the long-term habit of saving. At Second Reading, we referred to the fact that the results from the pilot schemes for the saving gateway were not definitive, partly because they did not extend very far beyond the maturity date. The Minister promised to provide some information on the Ipsos MORI survey, which has been carried out subsequent to the pilots. In the Chamber this morning, I received the Minister’s letter giving a one-page summary of the Ipsos MORI findings. That was clearly encouraging, but we need to see more detail of the findings. When the Minister replies, will he say when we should expect to get the full copy of the Ipsos MORI report? I ask that in particular because the pilots had much wider groups of people involved than those simply in the target group of the Bill. The Ipsos MORI overall findings do not necessarily speak to the kind of results that we can expect from the saving gateway scheme once it is operational. It is to do with that more granular level, in particular the difference between the relatively higher incomes that were included in some of the pilots compared with the lower incomes that were included in the saving gateway scheme, for reasons that we support. In the pilots, the propensity to save was higher, as is not surprising in those higher up the income scale. A key issue that HMRC should take into account is whether the providers would be willing to provide at least some basic financial literacy material alongside the accounts. The pilot studies showed relatively little take up of financial education. I do not know whether that was because of the way in which it was offered, or whether it was genuinely not needed. I have a basic gut instinct that there is a very real need to raise the level of financial understanding of those people at whom saving gateway accounts are targeted. In another place, there was discussion of the undesirability of saving gateway account holders being bombarded with material offering other financial services inappropriately. Those of us who have accounts with the main clearing banks know the kind of credit and loan opportunities that we are constantly offered. There was a feeling in another place that it was undesirable that those should be pushed at this group of account holders. I toyed with whether something along the lines of HMRC abstaining from such marketing to such account holders should be proposed. Instead, my amendment focuses on the positive of giving information, raising awareness and educating people in this group, rather than prohibiting the banks from doing things. Financial literacy is such a huge problem, as the Thoresen review showed, that any way of improving the level of understanding in society would be valuable. If we can link it to the saving gateway in a formal and positive way, that would be helpful, and it would improve the possibility of good outcomes from the saving gateway scheme. I beg to move.