Saving Gateway Accounts Bill

I did not doubt that my noble friend would make that comment. I have therefore had the argument, which the noble Lord, Lord Newby, has proposed on other occasions, reinforced. Of course, I understand his point about fairness in the provision of government support for saving. However, the principle behind the scheme is different from ISAs. It is to give support to those with a low propensity to save because they have limited resources, and to kick-start the saving habit with a generous government subsidy. This legislation can be effective. For instance, the pilot indicated that, three months after the first pilot had finished, 41 per cent of participants were still saving regularly compared to only 16 per cent who saved regularly beforehand. That is encouraging evidence of the potential effectiveness of this scheme. It should act as a one-off catalyst rather than an ongoing incentive. The noble Lord will recognise the costs involved in increasing the number of the accounts that could be held. We had a discussion earlier this afternoon on the costs of the scheme. Of course, we put this scheme in the framework of social responsibility and financial inclusion. With such small accounts, the number of transactions is unlikely to be affected; they are not bringing any profit—or only very limited profit—to the providers. So we are concerned about the costs of the scheme as it stands. As I indicated earlier, we are optimistic about the results of our fruitful discussions with a range of potential providers, but that is not to say that we should be anything other than careful about the scheme’s costs to such providers. We must therefore look at the scheme in those terms. I understand the sentiment expressed by the noble Lord, Lord Newby, at considerable length, and reinforced by my noble friend Lord Morgan. It is important that we provide fairness in saving schemes. Prior to this scheme being made available, the position significantly benefits the better off. You can start an ISA at quite a low level, but we all know that the figures normally expected for ISAs are several thousands pounds: £3,600 in cash and £7,200 in equities. An awful lot of people subscribe monthly and hit lower levels than that over the course the tax year. This provision is clearly directed at a different group of people, who have limited motivation to save because of their limited resources. They are targeted and will be supported, but we intend that this should be a one-off scheme to kick-start the saving habit. That is the essential principle of the scheme. Although the noble Lord has given voice to proper sentiments, I hope that he will recognise that the Government have to work within a proper framework of what is practicable to keep costs at a reasonable level so that the scheme can be successful.