The Financial Secretary to the Treasury (John Healey): The Government's joint goal with the banks, which we set at the pre-Budget report last year, is to halve the number of adults in households without a bank account, because they lose out both financially and socially. We want to make significant progress within two years, which is why the Chancellor has set up the financial inclusion taskforce to monitor progress towards that goal and to report on what more needs to be done.
Kerry McCarthy: Is the Minister aware that, although some of our banks and building societies have embraced that agenda, there is clear anecdotal evidence that other institutions have tried to offload that responsibility by, for example, telling potential customers that they do not have the forms or staff available to process the accounts? Does he agree that it is disgraceful that some of our most profitable institutions are seeking to evade their responsibility, and can he assure me that steps will be taken to ensure that all our banking institutions have a responsibility to provide basic bank accounts for people on low incomes?
John Healey: Sixteen banks offer basic bank accounts to their customers and I welcome my hon. Friend's interest and that of the Treasury Committee, on which she serves. Some 2.8 million adults live in households without access to bank accounts. The British Bankers Association produces quarterly figures on the number of basic bank accounts, which show that nearly 1.4 million have been opened in the past couple of years. We have set up the taskforce to examine the issues raised by my hon. Friend and to monitor progress. After two years, we will assess what more needs to be done and take decisions based on the taskforce's recommendations.
Susan Kramer (Richmond Park)
(LD): Is the Financial Secretary aware that a significant number of people in my constituency do not have bank accounts?
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People are discouraged by the paperwork that is required to open a basic bank account, which includes utility bills and certification by a professional. Does the Financial Secretary agree that such checks should be used to regulate questionable large financial transactions and to identify fraud? Using such checks on basic bank accounts is like using a sledgehammer to crack a very small nut, and it discourages people who need easy and regular access to the financial services industry.
John Healey: The hon. Lady may not know that the revised banking code covers basic bank accounts, so I shall take the trouble to send her a copy, which she may find interesting. Given her concerns about her constituents, she will appreciate the importance of the £120 million contribution to the financial inclusion fund, which my right hon. Friend the Chancellor launched last year. The fund is designed to improve access not only to bank accounts and banking services, but to affordable credit and face-to-face money advice, which is an important service for our constituents.
Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): When my hon. Friend examines individual bank accounts, will he talk to the banks about people who have an individual account and who want to start a small creative or innovative business? We are all in favour of the money-laundering laws that make it difficult for people to manipulate money from drugs, fraud and organised crime, but more and more of my constituents are telling me that it takes a long time to get a bank account, which makes it difficult to start a business.
John Healey: My hon. Friend takes an active interest in the subject, so he may be interested in the quarterly figures published by the British Bankers Association, which cover not only the number of basic bank accounts opened each quarter, but the number of basic bank account holders who go on to take up fuller banking services. On money laundering, I hope that all hon. Members understand why the provisions have been introduced. The anti-money laundering regime includes some high-level requirements, and the guidance notes for implementing those requirements are being revised to take account of disadvantaged groups.
The Chief Secretary to the Treasury (Mr. Des Browne):
In real terms, investment has risen by 32 per cent. since 1997. In nominal terms, the investment to GDP ratio was 11.5 per cent. in 1997 and 9.5 per cent. in 2004, mainly due to prices of investment goods falling relative to the general price level. Total UK gross saving as a share of GDP at nominal prices was 16.8 per cent. in 1997 and 14.8 per cent. in 2004.
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Mr. Browne: The savings ratio has not halved: the hon. Gentleman's arithmetic is wrong in that respect. He asks me why the savings ratio has reduced. It has of course reduced in other countries too, principally in our international competitors. He suggests that the reduction in the savings ratio reflects a wider measure of wealth in the economy, but it does not. Total household assets in the UK have risen by around 50 per cent. in real terms since the beginning of 1997.The savings ratio is lower now because of the stability that we have created in the economy. Households have reduced precautionary savings because the fear of unemployment has been reduced, as has the fear of inflation.
Andrew Miller (Ellesmere Port and Neston) (Lab): My constituency, like that of my hon. Friend the Member for Bolsover (Mr. Skinner), has seen a massive transformation over recent years. That is partly because of massive investments that have occurred as a result of macro-economic stability. Does the model that the Treasury uses enable it to look at what would have been the case had we not had that that macro-economic stability?
Mr. Browne: What my hon. Friend has experienced in his constituency has been experienced across the UK. Business investment is shown to have risen to record levels in quarter two, having more than made up for the cyclical weaknesses seen between 2001 and 2003. Annual business investment growth has been positive for six consecutive quarters. Business investment rose by 3.4 per cent. in 2004, which is its strongest rate of growth since 2000.
Mr. Philip Hollobone (Kettering) (Con): We may have the fourth largest economy in the world, but according to the World Economic Forum, Britain's savings ratio is now 98th out of 117 countries around the world. It also says that that is damaging Britain's economic performance. Does the Minister agree?
Mr. Browne: I do not agree with the hon. Gentleman, for the reasons that I gave in my answer to the hon. Member for Castle Point (Bob Spink). If the figures that he quotes are accurateI do not have access to them at the momentAmerica must be 117th.
The Chancellor of the Exchequer (Mr. Gordon Brown):
I should like to inform the House that the international finance facility for immunisation has been launched by
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the UK, France, Italy, Spain and Sweden. With the backing of the Gates Foundation, it will provide an additional $4 billion over the next 10 years for vaccination against some of the deadliest diseases in the world's poorest countries. It is estimated that, through this facility alone, the lives of 5 million adults and children will be saved.
Mr. Brown: I am attending a G20 meeting this weekend and, now that the facility has been successfully launched, I shall ask other countries to play a part in its development. We have already added several European countries. I have invited China, South Africa and Brazil to join the facility. I hope that the American Government will back the Gates Foundation, which has already contributed substantial amounts of money to the facility: that is an American contribution. As the figures that I gave the House show, the facility's potential to save lives is enormous.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I congratulate the Chancellor on his work to get the international finance facility up and running. However, we know that the chances of reaching our millennium development goals, particularly in Africa, are fairly slim. We need an acceleration of aid to those countries. How will the IFF will assist in reaching our 0.7 per cent. target for overseas development aid?
Mr. Brown: The IFF is additional money that we are putting in as the British Government, but we are front-loading the expenditures by borrowing on the international capital markets on the strength of our investment. The Gates Foundation has supported it from the private sector, and we now have several countries supporting it from the public sector. In general, we wish to move towards an IFF not only for immunisation but to finance education and general building up of capacity in health care. Anybody who looks at the figures knows that our chances of meeting the millennium development goals depend on front-loading investment over the next few years. That is why I hope that the all-party support for the IFF that we have here will be reflected in growing support from beyond the 50 countries that are already signed up to supporting it.