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This is a valuable initiative which will help to encourage low income savers and we look forward to working with the Government to ensure that the scheme is a success.
The right hon. Member for Wokingham and others mentioned interest rates. It is important that we kick-start a regular savings habit. The hon. Member for East Antrim (Sammy Wilson) put it well when he said that the key point was to stimulate the savings habit, and the point about the match funding is that it will do exactly that. A match rate of 50p in the pound is the equivalent of an interest rate of 44 per cent. The interest rates will be very much a matter for the individual providers, however. We are not planning to see the accounts introduced until 2010, so I would not expect the providers to say now whether they will introduce interest rates or, if they were to do so, what those rates would be.
Some potential providers have suggested that paying interest would result in significant costs and complexities in the design of the systems for these relatively low-level savings accounts. Some respondents to the consultation last year also suggested that the need to understand and compare different types of ratios could put off inexperienced savers. That reinforces the point about promoting financial literacy. This is something that we will continue to show an interest in, but we believe that the deciding factor for people opening a saving gateway account will be the match rate provided by the Government. If possible, we would like to see competitive market and good savings rates offered to those in saving gateway accounts. What happens at the end of the saving gateway is what is important, as both the hon. Member for East Antrim and the hon. Member for South-West Hertfordshire said.
To clarify matters further, savers who have come to the end of a saving gateway account will be free to choose what happens to their money next. The Government believe that an element of choice is very important. We expect providers to treat customers fairly and we anticipate that they will want to help their customers to access the savings option that is most suitable to their needs. We
will hold a dialogue with them to ensure that there are sensible default options for those who fail to express a preference during the two-year period of the saving gateway account. As I said earlier, it is possible for the account to be rolled into an ISA and some providers might set that as the default option. To be clear, if a provider offered a poor rate of return, it would be open to savers to move their money to another type of account or another provider with a better rate of return.
Rob Marris: One of the concerns expressed earlier was about whether sufficient information would be available when people opened these accounts. We received some reassurances about that from my right hon. Friend the Chief Secretary, but can the Economic Secretary provide some further reassurances about what information will be available to individual savers at the conclusion of their two yearsor however long it might beso that people are aware of their options, whether it be to move their money into ISAs, to close the account or to move it somewhere else? It is important that some of the most financially disadvantaged people in our society have full information, so will the Minister provide some examples?
Ian Pearson: My hon. Friend makes a very good point. As I mentioned at the start, the issue of financial inclusion is very important to this Government. As he will be aware, we commissioned Otto Thoresen to produce a report, and we are taking forward its recommendations on financial inclusion. With the Financial Services Authority, we are establishing pilots in the north-west and the north-east and today we announced some of the providers that will help to deliver them. We view the establishment of a pathfinder scheme to improve financial literacy and advice as an important area, to which we continue to pay attention, and the Government are taking other measures as well. My hon. Friend will be aware of our efforts in the education and school system to provide better information from an early age, sometimes as young as seven. We are planning to build further such measures into the curriculum, so that better advice is provided in the future.
The hon. Member for Fareham asked about the automatic rolling over of accounts. As I explained, account providers will have to put in place a default option in cases where savers do not provide instructions about what they want to happen to the account on maturity. They should have choices, as I said.
Finally, let me pick up on a matter raised by the hon. Member for South-West Hertfordshire, who asked why the Bill did not make it clear that a person could have only one account. The requirement that a person may open only one saving gateway account in a lifetime will be contained in regulations. Our approach is that the Bill allows some flexibility so that the Government have the option to offer the saving gateway to eligible individuals again in future. Depending on the schemes success and the financial climate, that may be appropriate in the future. In our view that represents sensible contingency planning, but no doubt we shall wish to discuss the technical questions in some detail in Committee.
I am grateful to all Members for the points that they have made, and look forward to pursuing them in Committee in a few weeks time. I am also grateful for
the support that we have received today for our objectives for the saving gateway: kick-starting that saving habit, and promoting financial inclusion. The pilots showed that the gateway could achieve those aims by offering a targeted, clear and strong incentive to the group who need it most, in the form of 50p for every £1 saved.
As a result of the Bill, a national saving gateway scheme will be introduced for the first time, offering that incentive to about 8 million people. It will give them a chance to save up to £600 and earn up to £300 from the Government. It will provide an amount that could make a real difference, and, more important, an experience that could help to build a lifetime saving habit. I commend it to the House.
That the following provisions shall apply to the Saving Gateway Accounts Bill:
1. The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 10 February 2009.
3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
7. Any other proceedings on the Bill (including any proceedings on any message from the Lords) may be programmed. ( Ms Butler. )
That, for the purposes of any Act resulting from the Saving Gateway Accounts Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred by the Commissioners for Her Majestys Revenue and Customs by virtue of the Act.( Ms Butler .)
In the business statement I made to the House on 18 December, I announced that the business of the House for this Thursday, 15 January, would be a topical debate followed by a general debate on armed forces personnel. On Monday this week, I chose Gaza as the subject of the topical debate. That would have been a one and a half hour debate.
Since then, I have become aware that there are many hon. Members who want to contribute to the debate, and representations have been made to me to make it a full days debate. I have therefore decided to put back the debate on armed forces personnel to another day and the business of the House this Thursday will be a full days debate on Gaza.
Mrs. Theresa May (Maidenhead) (Con): I welcome the fact that the Leader of the House is giving the House more time in which to debate the important topic of Gaza; that is entirely appropriate. I do, however, have two questions on that debate and one question on the defence debate that has been moved.
In a topical debate, there are rules on the length of time for Front-Bench speeches and there are no winding-up speeches. Is it the right hon. and learned Ladys intention that the debate on Gaza will be run under the rules for topical debates or conducted as a general debate, where those rules do not apply? Secondly, will she confirm that the debate will be able to cover a wider remit than merely the immediate situation in Gaza? Will hon. Members be able to explore the implications for wider issues in the middle east?
On the defence debate that has been postponed, the right hon. and learned Lady will recall that in business questions before the recess, questions were asked about the extent to which that debate would cover procurement as well as personnel matters. Will she, first, guarantee that that debate will come to the House in good time and will not be postponed ad infinitum; and, secondly, reconsider the topic of that debate and fulfil the undertaking that she gave the House before Christmas to ensure that hon. Members would be able in that debate to discuss not only the important subject of armed forces personnel, but the subject of procurement, which will enable Members to consider the Governments decision to delay the procurement of two new aircraft carriers?
Ms Harman: I can confirm that the debate on Gaza will be a general debate, not an extended topical debate, and will therefore be run along the usual lines of general debate, with opening and closing speeches from the Front Benches. As for its remit, the topic will be Gaza, but although it is a matter for the Chair, I am sure that it will be possible to raise the wider implications extending beyond Gaza and the region.
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