Saving Gateway Accounts Bill

My Lords, I thank the Minister for tabling his amendment in response to our debate in Grand Committee about the need for a review of the saving gateway scheme. I shall speak briefly to my four amendments to Amendment 15. The Minister has sought to answer some of the points that he thinks I am going to make, but I have one or two extra points to put to him. I am quite sure that the review is needed. This week, for example, the Government released the findings of the latest Ipsos MORI report on the second pilot, but it tells us relatively little about the saving gateway scheme in the Bill because the coverage of the pilots was quite different from that in the Bill. We therefore have very little research information to help us to understand the effect of savings on the target group, which has been narrowed down for the purposes of the Bill, so I remain quite convinced that we need work to be done and a review to be carried out, and I am pleased that the Government have now come to that view. Before I get into the detail of my amendments, I have one point to note but not pursue. The amendment to which I spoke in Grand Committee sought a review of the effectiveness of the saving gateway scheme. The Government’s Amendment 14 calls for a review of the effect of various things, and while "effect" and "effectiveness" come from the same linguistic stable, they mean rather different things. I had hoped for a review that set out how well the saving gateway scheme had performed and that did not merely confine itself to what effect the scheme had had. Obviously it will be for Parliament to judge the effectiveness of the saving gateway scheme, but it would have been helpful if the review had provided some assistance in that regard. As I said, however, I do not intend to pursue that further. Amendment 15 sets out three additional things that should be included in the list. I completely accept that subsection (1)(e) of the proposed new clause allows the Treasury to specify additional things, if it chooses, before the review is commissioned and that could be included. However, the matters covered in my Amendment 15 arose during consideration of the Bill’s proposals not only in your Lordships’ House but in another place, and it is surprising that they are absent. In particular, the first item in my Amendment 15 is, ""the provision of financial information and advice"." While some of that could be read between the lines in the government amendments, it is not there explicitly. I find that surprising; it kind of assumes that all the current actions by the Government on financial inclusion will be perfectly executed by the time that seven years is up. I rather doubt that that is the case. The second item is the impact of the provisions on eligibility. I am not sure whether the Minister quite understood the points that I was going to try to make here. There is a concern that, at one end of the spectrum, the scheme could in a sense be abused by those with a transient relationship with the benefits system. When they get their notice of eligibility, they have parents who can bankroll their ability to fund a saving gateway account and to get the Government’s generous 50 per cent maturity payment at the end. We would not want the saving gateway account to be heavily used in that way, if at all. At the other extreme, the vouchers only last for three months. It may well be that those on longer-term benefits cannot, for one reason or another, feel able to open an account within that period and are not aware of their ability to apply for a further voucher to be issued. We would not be happy if the saving gateway scheme missed those people if, at a later point, they could effectively have opened an account. From whichever way you look at it in here, there are ways in which that scheme’s eligibility mechanism may not work to achieve the end result. The Minister did not quite address that, and I could not see it being addressed in the Government’s own amendment. Then there is the issue of account providers. I specifically sought to address that because we had much discussion about whether there will be a vibrant and competitive marketplace for account providers. The Government say that that is a barrier to eligible persons opening an account, rather than looking at it from the account providers’ end of the telescope. Those are the three items I would raise in connection with that amendment. The Minister sought to justify the way in which the independent review is to be provided to HMRC, which would then, ""provide the results and conclusions … to the Treasury"." I am rather suspicious of that formulation. It has an independent review getting fed into HMRC, which then has the opportunity to interfere with the "results and conclusions" before they are passed on to the Treasury, which has to lay them before Parliament. I do not understand why the review itself is not provided straight the way through the system. Why is there an opportunity for the commissioners to rephrase the findings? The Government have, for example, released the whole of the Ipsos MORI report this week but there might be occasions in future where the information is modified. That is not a helpful formula; it is not even the normal one for these kinds of things. On whether Parliament is both Houses of Parliament, I used to think it was not necessary to separate out each House in relation to Parliament, but the Government do not always use "Parliament" to mean both Houses. For example, the Prime Minister in one of his many makeover statements announced that public appointments would be subject to confirmatory hearings by Parliament. When we pressed that further, we discovered that in this case the Government meant Parliament was only the other place. Therefore, whenever we see a reference to Parliament now, we always feel that it is necessary to clarify whether the Government mean both Houses of Parliament or simply the other place, because they have form, if you like, on using Parliament to mean both things and not necessarily being clear at the time. I am grateful to the Minister for setting out that the Government intend the independent review to be independent of the Treasury and HMRC, which was what I sought to tease out in Amendment 18. I sought to avoid the kind of so-called independent review that was done, for example, of the FSA’s handling of Northern Rock. It was carried out by the FSA’s supposedly independent internal audit department, but that could not have qualified for a properly independent review. The Government have answered me in relation to Amendment 18.