Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 120-123)


30 NOVEMBER 2005

  Q120  Chairman: If they wanted to offer a cash-based product on their own?

  Mr Lewis: If they approached us and asked us would we consider it?

  Q121  Chairman: Yes.

  Mr Lewis: Yes.

  Q122  Chairman: I want to be clear about that. The rules could be changed to allow them to consider that. That is a yes?

  Mr Lewis: At the moment, as I understand it, they have to offer stakeholders. That is the status quo and I find it very difficult to believe we would want to move away from that.

  Q123  Chairman: Okay. Finally, on this whole issue of targets and evaluation, I hope there is no misunderstanding here. This Committee produced a report on the child trust funds and supported it. It was supportive of the initiative and its report was positive about that. You were referring to enemies of the fund; they are not in this Committee, we are very supportive of the initiative. However, we did have concerns right at the beginning about take-up and whether it is being taken up by the most appropriate group that it was targeted to—the low-income group—and I am anxious to know how you will measure how the policy is being delivered in that regard if you do not have targets.

  Mr Lewis: Well, there are two things. First of all, there is the number of people who make the choice to open their own account. Then we know there will be a gap and the state will have to open accounts for them. Then there is the long-term change in behaviour in terms of savings and investment and a belief amongst sections of the population for whom that is not currently relevant that that becomes relevant and affects behaviour and choices, so I think sometimes it is the responsibility of politicians and policymakers to be upfront about saying that the kind of change we are trying to achieve here is long term and therefore it would be best to hold fire on short-term, knee-jerk judgments or reactions because this is part of a much bigger picture, as I said earlier, about transforming society, about inter-generational ambition, aspiration and opportunities. Sometimes it is right to look at policies on a long-term basis and the impact they have on individuals and society more generally, and also I suppose the economy, rather than rush to premature judgments, but along the way there is a transparency about the information that this Committee and others will have which will either enable you to say, "We do not think this is as good as it could be," or maybe you could say, "Actually if you did it slightly differently then maybe you would be more effective in achieving your objectives." I think some of the questions that have been asked today for me are not so much questions as very constructive views of how the system could be better. At the end of the day the system has already been designed, it is up and running, we are going, but there is no reason why we cannot make changes where those changes in the end are in our interest if we want to achieve our objective. There are certain things which have been said today which I regard as helpful and constructive.

  Chairman: Good, I am glad about that. Maybe we should have this kind of session about once a year and see how this policy is going on, but we will let you go now. Thank you very much.

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