Saving Gateway Accounts Bill

As the Minister has said, we have been calling for a review of the scheme's effectiveness both in this place and in the other place. Let us be clear why such a review is important. We have supported this measure because we believe it is vital to encourage savings and to develop a savings culture among people on lower incomes in this country and this scheme is aimed at improving that culture. It is, in many respects, a relatively generous scheme—it has a 50p matching rate—and we want to ensure that the taxpayers' money that is being used to support the scheme is being spent wisely and effectively, and that taxpayers get a return from this scheme through the encouragement of a high level of savings among people on low incomes. The Bill was deficient when it first came before us because it did not contain a statutory requirement to conduct a review, and attempts were made both in this place and in the other place to amend that. To an extent, we welcome this amendment, but it contains gaps, two of which, in particular, were demonstrated in the amendment tabled in the other place by my noble Friend Baroness Noakes—I shall return to those in a moment. I am concerned that the report will be laid before this House only within seven years of""the coming into force of section 6."" During the intervening period a significant amount of taxpayers' money will be spent supporting this scheme. I hope that the Government see the seven-year period not as a time scale within which the report will be brought before this House; I hope that they do not wait until the seventh anniversary and then report. The sooner we know how effective the scheme is, the better it will be. We will then be able to consider whether it is a good use of taxpayers' money or whether changes need to be made to the matching payment, the maturity period or the range of eligibility to make it more effective in encouraging the savings culture. The first of the two areas omitted from the Government's amendment but addressed in that of my noble Friend relates to take-up. The Government amendment talks about the effect of saving gateway accounts on attitudes to saving, the behavioural impact of the accounts, the involvement of people who use them with the institutions offering the financial services and the barriers to opening the accounts, but it does not mention take-up, whether the take-up rate is adequate and whether that rate should be improved. I understand that an annual report will be made on the number of people who open these accounts, in line with similar statistics produced on the child trust fund, but it would be helpful to have an independent review of the level of take-up and of whether that rate is sufficient to justify the existence of the saving gateway account. The Minister will point out that subsection (e) of the new clause includes the opportunity to add other areas to the review and I hope that she will confirm that she will ensure—should she be in a position to do so in seven years' time—that the take-up rate would be included. The second area omitted is financial education. A series of pilots took place as part of the long evaluation of this idea, and they suggested that account opening should happen in conjunction with financial education. We are talking about a group of people who do not necessarily have bank accounts, and they may be sceptical about, or uncomfortable with, dealing with financial institutions. Support may be needed for people opening these accounts. If we are to encourage a savings culture, we need to provide incentives to save and accounts that people are happy to save in, and we must provide financial education in parallel with that, to persuade people of the long-term benefits of saving. I am disappointed that the Government have not taken the opportunity to include explicit reference to monitoring the financial education that is provided alongside the opening of the accounts. Perhaps the Minister can say whether financial education will be covered in the independent review and should be taken up under subsection (e). We have called for independent reviews of the system, so we will not oppose the amendment, but the Government could have thought more broadly about what the independent review will cover and have been more timely about when it will be laid before Parliament.