Saving Gateway Accounts Bill

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The Committee consisted of the following Members:

Chairmen: John Bercow, † David Taylor

Ainger, Nick (Carmarthen, West and South Pembrokeshire) (Lab)

Barlow, Ms Celia (Hove) (Lab)

† Blizzard, Mr. Bob (Lord Commissioner of Her Majesty's Treasury)

Breed, Mr. Colin (South-East Cornwall) (LD)

† Browne, Mr. Jeremy (Taunton) (LD)

Devine, Mr. Jim (Livingston) (Lab)

† Duddridge, James (Rochford and Southend, East) (Con)

† Hoban, Mr. Mark (Fareham) (Con)

† Howell, John (Henley) (Con)

† James, Mrs. Siân C. (Swansea, East) (Lab)

† Ladyman, Dr. Stephen (South Thanet) (Lab)

Mudie, Mr. George (Leeds, East) (Lab)

† Pearson, Ian (Economic Secretary to the Treasury)

Stoate, Dr. Howard (Dartford) (Lab)

† Timpson, Mr. Edward (Crewe and Nantwich) (Con)

† Walker, Mr. Charles (Broxbourne) (Con)

Chris Stanton, Sarah Hartwell-Naguib, Committee Clerks

† attended the Committee

Witnesses

Sharon Collard, Personal Finance Research Centre, University of Bristol

Teresa Perchard, Director of Policy, Citizens Advice

Brian Pomeroy, Chairman, Financial Inclusion Taskforce

Matthew Wakefield, Senior Research Economist, Institute for Fiscal Studies

Column number: 1

Public Bill Committee

Tuesday 27 January 2009

(Morning)

[David Taylor in the Chair]

Saving Gateway Accounts Bill

10.30 am

The Chairman: Good morning. Before we begin, I have a few preliminary announcements. Hon. Members may remove their jackets during Committee meetings if they wish. We are no doubt expecting a January heat wave. Hon. Members must ensure that mobile phones and pagers are turned off or switched to silent.

There is a money resolution in connection with the Bill, copies of which are available in the room. I remind hon. Members that adequate notice should be given of amendments. As a general rule, my fellow Chairman, Mr. Bercow, and I do not intend to call starred amendments, including any that are reached during afternoon sittings.

The Committee will first be asked to consider the programme motion on the amendment paper. I chaired the Programming Sub-Committee last week. Debate on that motion today is limited to half an hour. We will then proceed to a motion to report written evidence, followed by a motion to permit the Committee to deliberate in private in advance of the oral evidence session. I hope that we will be able to take those formally.

Assuming that the motion to deliberate in private is passed, the Committee will move into private session. Once we have deliberated, witnesses and others will be invited back into the room and the oral evidence session will begin. For those who are new to this procedure, which includes me, I should say that the evidence session will proceed under the Select Committee format. The one difference is that I will not lead in the same way as a Select Committee Chairman. I am not able to ask questions, but must hold the ring in an impartial way and bring people in as appropriate. I will also keep order, if that is a factor.

If the Committee agrees to the programme motion, we will hear oral evidence this morning and this afternoon before reverting to the traditional format next week.

The Economic Secretary to the Treasury (Ian Pearson): I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 10.30 am on Tuesday 27 January) meet—

(a) at 4.30 pm on Tuesday 27 January;

(b) at 10.30 am and 4.30 pm on Tuesday 3 February;

(c) at 9.00 am and 1.00 pm on Thursday 5 February;

(d) at 10.30 am and 4.30 pm on Tuesday 10 February;

(2) the Committee shall hear oral evidence in accordance with the following Table:

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Date	Time	Witness
Tuesday 27 January	Until no later than 12.30 pm	Financial Inclusion Taskforce; Institute for Fiscal Studies; Personal Finance Research Centre, University of Bristol; Citizens’ Advice.
Tuesday 27 January	Until no later than 6.30 pm.	British Bankers’ Association; Building Societies Association; Association of British Credit Unions Limited; Post Office Limited.

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on Tuesday 10 February.

I welcome you to the Committee, Mr. Taylor. I am sure that all hon. Members are looking forward to serving under your chairmanship and that of Mr. Bercow.

We had a consensual Second Reading debate, with support for the general principles of the Bill from all parties. However, there are many details that hon. Members will want to explore.

The programme motion has been agreed to informally. Our intention is to conclude proceedings by 10 February. We think that that will allow sufficient time for the witness sessions and for full scrutiny of the Bill.

I draw the attention of Committee members to the list of relevant documents that has been circulated. They might find the consultation document on the saving gateway helpful. It was published in March last year, and I am sure that a number of hon. Members have read it. In addition, hon. Members might want to consult on the summary of responses to the consultation, which was published on the day the Bill was introduced in December. It sets out the changes that were made in response to the consultation document.

I do not think that it is appropriate for me as a Minister to ask questions of witnesses on my Bill. I therefore do not intend to participate in those sessions. However, I hope to pop in and out during the evidence sessions as time allows. I am sure that the Committee will be particularly interested to hear about the pilots that led to the final decisions on the detail of the Bill.

Mr. Mark Hoban (Fareham) (Con): We are proceeding so far on a consensual basis, Mr. Taylor, so I suspect that we will not be troubling very much either you or your co-Chairman, Mr Bercow, in the heat of the debate on this Bill in Committee. Certainly, having gone through the Bill again, I suspect that we will spend more time discussing the statutory instruments when they come before the House than discussing the Bill itself, as it is predominantly an enabling Bill. We therefore have no problem with the programme motion as proposed.

Question put and agreed to.

Resolved,

That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.—(Ian Pearson.)

Resolved,

That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Ian Pearson.)

Column number: 3

10.36 am

The Committee deliberated in private.

10.45 am

On resuming—

The Chairman: Good morning and welcome. Thank you for giving your time to help the Committee in its deliberations. We are going to hear evidence from Brian Pomeroy of the Financial Inclusion Taskforce, Matthew Wakefield of the Institute for Fiscal Studies, Sharon Collard of the Personal Finance Research Centre, University of Bristol, and Teresa Perchard of Citizens Advice. Welcome to our meeting today. Will you start by saying a few words about yourselves?

Brian Pomeroy: I chair the Financial Inclusion Taskforce, which advises the Treasury on a range of issues concerned with financial inclusion. About a year ago the topic of savings was added to our terms of reference, so since then we have included savings in our remit and have looked in particular at the saving gateway and given the Treasury our view of it. I personally took part in some of the early discussions between Treasury officials and potential providers of the saving gateway.

Matthew Wakefield: I am a senior research economist at the Institute for Fiscal Studies. My research involves issues of households’ savings decisions and of pensions and savings policy. I was involved in evaluating the second pilot of the saving gateway account.

Sharon Collard: I am a senior research fellow at the Personal Finance Research Centre based at Bristol University. We conduct social research around issues of personal finance and were involved in the evaluation of the first saving gateway pilot.

Teresa Perchard: I am director of policy for Citizens Advice, which represents the interests of Citizens Advice bureaux throughout England and Wales and the people who come to us for advice. We deal with 5.5 million problems a year and our single biggest area of work is debt. Most of our debt clients are on very low incomes and we are interested in providing them with more support to help them deal with income shocks.

I am a member of the Financial Inclusion Taskforce and, since the Government’s decision to roll out the saving gateway was announced, have had several discussions with Her Majesty’s Revenue and Customs about the potential role of Citizens Advice bureaux in promoting saving gateway accounts when they are up and running. There is no fully formed action plan, but we have had discussions with the Treasury on that.

The Chairman: Before calling the first Member, I would like to remind all Members that questions should be limited to the scope of the Bill. I ask witnesses please to raise their voices, as the acoustics in this room are not wonderful.

Q 11Dr. Stephen Ladyman (South Thanet) (Lab): May I clarify, Ms Collard, whether you were responsible for evaluating the first pilot or both?

Sharon Collard: We were responsible for evaluating the first pilot.

Matthew Wakefield: I was part of the team evaluating the second pilot.

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Q 2Dr. Ladyman: If I could start with Ms Collard, could you tell us a bit more about how the first pilot was evaluated?

Sharon Collard: In terms of the method that was used?

Dr. Ladyman: Yes.

Sharon Collard: The first pilot was different from the second in that it concentrated solely on low-income households. We used a range of methods to evaluate it, including face-to-face interview surveys at the beginning and end of the scheme. We also conducted telephone interviews with what we called a comparison group—people who lived in areas adjacent to the saving gateway pilot areas who shared similar characteristics to the people who would be eligible for the saving gateway, to compare whether their saving behaviour would change over the period of the pilot. It was to find out what impact the saving gateway had, independent of other factors. We also conducted qualitative interviews with saving gateway participants at various stages in the course of the pilot.

Q 3Dr. Ladyman: What proportion, roughly speaking, of the people who attempted to save did you make contact with as part of the evaluation?

Sharon Collard: I do not have that information with me. What proportion of people who opened accounts did we speak to?

Q 4Dr. Ladyman: Yes. Essentially, you sampled them. You did not contact everybody.

Sharon Collard: No, no—just fewer than 1,500 accounts were opened. I need to check how many people took part in the surveys. I am sorry, I cannot remember off the top of my head.

Q 5Dr. Ladyman: Mr. Wakefield, how was the second pilot evaluated?

Matthew Wakefield: The second pilot was a rather larger scheme. As Sharon has said already, it extended the eligibility criteria to include those somewhat higher up the income distribution. There were two parts to the evaluation. One was a kind of quantitative assessment in which we tried to assess whether people were saving more and how much more they were saving if they had the accounts than if they did not have them. In the six areas in which the accounts operated, we contacted a rather large set of people to sample. We offered approximately half of those the chance to open an account and did not offer that chance to the others. We surveyed them to understand their saving behaviour, so we had a comparison group with similar characteristics in terms of income levels and so on.

Alongside that quantitative evaluation was a series of qualitative work, which involved in-depth, face-to-face interviews with people who had accounts and account providers. The information for the quantitative survey was gathered through a telephone survey, which we followed up at two points during the operation of the accounts.

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Prepared 28 January 2009