Ian
Pearson: I understand the point that the hon. Member is
making and, on grounds of fairness, we should look to ensure that
people are treated identically if they have had similar periods off
benefits. We are talking about a very small number of people, but let
me reflect on the point about how the administrative systems will work.
Clearly, we want to ensure that we treat all people fairly, even if we
are talking about those who are moving quickly from benefits to being
in work at a level where they are not entitled to benefits. I will come
back to the Committee on
that.
Mr.
Mudie: I would be grateful if the Economic Secretary
answered my question, which got caught up in other questions. I know
that it was insignificant, but I would still appreciate an answer. I
see from the puzzlement on his face that he has forgotten it. It was
simply about a person who turns up and says that they have not received
an eligibility
indication. I
am anticipating an answer, but that involves time, so I shall ask two
further questions. First, I would like the Economic Secretary to
reconsider the business of following up those who do not take up
benefits. We are conscious of the lack of take-up of various benefits
and we profess to being interested in persuading people to take up
benefits that are profitable to them—this is certainly one. I do
not regard receiving a reminder as being—to use the Economic
Secretary’s
phrase—bombarded. My
second question is simply about data received: four months down the
road, who does an individual who has not received a form, but who has
heard on the community grapevine that they should have received one,
approach at HMRC? That ties up with my first question: will such people
then receive a fresh eligibility date that runs for two
years?
Ian
Pearson: I apologise to my hon. Friend for not replying to
his original question. If anybody has been missed, they are entitled to
apply to HMRC for notice of eligibility. I think that that will
probably take into account the situation that the hon. Member for
Taunton talked about as
well. On
whether we want to issue repeat notices, I want us to get that policy
and legislation implemented, and to have a three-month notice period to
ensure that we promote saving gateway as a programme and to see what
the take-up is. If at some point after that we think that take-up rates
are lower than desired and that it would be a worthwhile use of
resources to issue repeat notices, we would have the flexibility to
consider it. We do not want to say now that we intend to have a rolling
programme of issuing repeat notices a certain number of times. Let us
promote the scheme and ensure that there are clear rules on
eligibility, which is lost after a three-month period. Let us see what
the take-up is, but reserve the right to do more in future if we want
to encourage the savings habit, which we all think is
important.
Mr.
Mudie: Will the Economic Secretary answer my third
question? If an individual turns up and says, “I have not
received it,” or, “I did not take it up,” will
they be given a new eligibility date or will they be given a notice
that relates to their first
date?
Ian
Pearson: Such a person could request a notice and it would
have that eligibility date on it. It would be round about the time that
the notice was issued to them. It would not be that they were missed
off and discovered it two and a half months later, leaving them with
only a couple of weeks to apply for a saving gateway account; it would
be from the date of the notice of eligibility that was issued. I would
imagine in normal processing terms that that would be a day or two
before it was received, due to the timing of posting arrangements. I
hope that that clarifies
matters.
Mr.
Browne: I am grateful to the Minister for the points he
has made. Also, it was helpful for the Committee to explore those
issues. I particularly appreciate his open-mindedness about ensuing
that there is consistency in the application of eligibility for people
who touch upon that eligibility only before moving on to, for example,
paid employment. I look forward to hearing his response to the
Committee either later in our deliberations or when the Bill returns to
the Chamber for consideration. I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn.
Mr.
Hoban: I beg to move amendment 22, in clause 2,
page 2, line 11, after
‘person’, insert ‘but
the person has not opened a Saving Gateway
account’. This
is a probing amendment. Subsection (3)
states: “Regulations
may provide that the Commissioners may... issue a further notice
of eligibility to an eligible
person”. We
touched on this subject a little during the previous debate. The clause
does not explain what happens when someone has already opened a saving
gateway account. Are they entitled to receive a further notice of
eligibility? We touched on a broader issue, which we will debate in a
later group of amendments, but it seems fairly straightforward that if
the intention is for people not to have more than one saving gateway
account, it should not be possible to reissue a notice of eligibility
if they already have an
account.
Ian
Pearson: The amendment relates to further notices of
eligibility being sent to people whose original notices have expired.
The Bill already provides that those can be sent only to people who
remain eligible for the saving gateway. The amendment also specifies
that they could be sent only to people who had not already opened a
saving gateway account. I hope to be able to persuade the hon.
Gentleman that that is our intention; it is set out in the draft
regulations, which we have
published. Draft
regulation 5(4) provides that a further notice of eligibility may be
issued to an eligible person at the discretion of the commissioners
where the expiry date of a previous notice has passed and the person
has not opened a saving gateway account. That addresses the issues
raised by my hon. Friends the Members for Leeds, East and for South
Thanet.
We believe it
sensible to put that provision in secondary legislation rather than the
Bill because if the Bill were to prevent HMRC from issuing a further
notice of eligibility, the flexibility for people to be given the
chance to have a second saving gateway account during their lifetime
would be removed. While at the moment we do not intend to offer a
second account, it is sensible and prudent to establish that if the
Government felt that appropriate, primary legislation would not be
required. In
clause 6(5), which we shall debate in due course, along with amendment
30, we have ensured flexibility to change our position. I hope that the
hon. Member for Fareham is reassured that we intend further notices of
eligibility to be sent only to people who have not already opened a
saving gateway account. I hope that his probing has given him the
answers he seeks and that he will withdraw the
amendment. 11.15
am
Mr.
Hoban: I am very grateful for that explanation and am
content that the regulations cover the point that I raised. I beg to
ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Question
proposed, That the clause stand part of the
Bill.
Mr.
Hoban: Given the long time we have spent on it, the
Committee might have thought that we had exhausted every possible
question about a clause that has only about 10 lines. However, I have
two questions. One is about ensuring that the notices of eligibility
are issued. Some benefits are administered by HMRC and some by the DWP.
How will HMRC ensure that people receive only one notice and not a
blizzard? The second question is about the information in the notice. I
know that this is covered by regulation, but in last week’s
evidence session, the account providers mentioned the administrative
cost of the accounts, and said that the likely cost would have an
impact on whether they were prepared to offer them. One way to reduce
the administrative cost to account providers is to give sufficient
information in the notice to ensure that providers do not need to go
through the usual account-opening process, which can be laborious and
time-consuming. I wonder whether that information will be sufficient
for providers to take as given a person’s name and address. Will
the Economic Secretary clarify
that?
Dr.
Ladyman: Now that we have reached the end of clause 2, it
is worth putting some thoughts on the record. It seems to me—the
Economic Secretary will confirm whether this is the
intention—that clauses 1 and 2 are about simplifying the
accounts to keep the cost as low as possible. The bankers and the
representatives from whom we took evidence made it clear that some of
them were reluctant to take on the accounts, because of the operational
costs. Given what we now know about the banking industry in this
country, I would have thought that the bankers might be keen to do
something pro bono and show themselves occasionally to be doing
something for the public good, but clearly that is not their intention.
They made it clear that if there is no profit they may not be prepared
to operate the
accounts. The
Economic Secretary and his team have tried to think of ways to keep the
process as simple and foolproof as possible, and I applaud him for
that. The problem is
that if things are kept simple, inefficiencies and unfairnesses are
introduced. We need to be absolutely open about those unfairnesses and
inefficiencies so that in five years’ time when we read the
article in the Daily Mail pointing out how many people who
perhaps otherwise should not have got one of these accounts have
managed to get one, or we read the stories from Opposition Members
about how many people have been to their surgeries complaining that
they have not been able to get one of the accounts when they should
have been able to do so, we have it on the record that we did this with
our eyes open and we knew that there would be
inefficiencies. My
hon. Friend has made it clear that he will reflect on the questions
that have been asked about the potential unfairnesses. That is a
generous offer, but I encourage him to reflect thoroughly and to spell
out on Report what the potential unfairnesses are. Some are quite
obvious. Some Opposition Members will lose their seats at the next
general election, and I hope that they will be eligible for
jobseeker’s allowance for only a short period. Nevertheless,
they will be entitled to open a saving gateway account during that
period. Good luck to them—they deserve to get some bounty from
the Labour Government—but we must accept that we have built that
level of poor targeting into the Bill.
As my hon.
Friend the Member for Leeds, East pointed out in his questioning, it is
more important that some of our constituents are genuinely the people
we want to target with these accounts, but those who are fortunate
enough to get work quickly may not receive their eligibility notice in
time, so they will come to us as Members of Parliament and say that it
is not right that they could not open such an account. We must be able
to explain to them the rationale behind the
measure. Finally,
the Minister said that repeat eligibility notices will not be issued. I
understand why he takes that view, but I encourage him to say that at
least one repeat notice should be sent to people who are still eligible
for the gateway saving account at the end of the three-month period.
Some people will be new to receiving benefits, because they will be out
of work for the first time. They may be unsure of how to budget and
wonder whether they can afford to put the money away. Three months
later, when they have managed to get their life in order, they may
realise that they could have afforded it. I encourage the Minister to
support at least one more
notice.
Mr.
Browne: Does the hon. Gentleman share my view that concern
about bombarding our constituents with correspondence does not seem to
weigh as heavily on the minds of Government Ministers when the
constituent concerned is indebted to Government agencies rather than
eligible for financial
support?
Dr.
Ladyman: I would not take that cynical view of Government
for one second. Making these accounts available is good news for our
constituents. If the Government were interested in currying favour with
our constituents, they would say that they are going to bombard them
with these
notices. If
there are not to be repeated eligibility notices, at least one more
notice should be sent out at the end of the three-month period, telling
people that they are
entitled to take up an account at any time until they cease to be
eligible under the system. It should say that we will not send them
more notices but that they should keep it in mind that they can still
set up an account. The purpose of the accounts is to encourage saving.
They are not intended to make a lot of money for anybody or to help to
reduce Government indebtedness by getting massive savings into the
banks. They are intended to encourage a state of mind. Therefore, I
think that it is worth sending one more reminder after three months
telling people that they continue to be eligible for these accounts,
even if that is the final reminder. I would like my hon. Friend to keep
those things in mind and to put some of his thoughts on the record on
Report. Ian
Pearson: Although the clause is just over eight lines
long, it has produced a number of debating points. However, I think
that it is important and that it should stand part of the Bill. I do
not think that there is any dispute about that, but I will respond to
the comments that have been
made. The
hon. Member for Fareham raised a number of operational points on how
the detail of the clause will work. Our intention is that the HMRC
system should be designed to ensure that only one notice of eligibility
is issued at a time. It will eliminate any duplication from the
different qualifying benefits. If somebody is eligible through more
than one route, that will be taken into
account. I
might have confused the Committee when talking about jobseeker’s
allowance and the transfer of data. Having thought through the matter
more clearly, there might be some data transfer issues. It is clear in
my mind and in the legislation that eligible persons under clause 3
will be entitled to open a saving gateway account. We must ensure that
the administrative arrangements are sufficiently robust so that people
who move on and off the jobseeker’s allowance register quickly
are not inconvenienced and do not have to go to the trouble of making a
separate request to
HMRC. The
hon. Gentleman also asked what proof of identity will be needed to open
an account and whether a notice of eligibility will give sufficient
assurance by providing the name and address. What evidence they accept
as proof of identity or address is a matter for the providers. We will
work with them and financial inclusion groups to explore how
providers’ ID requirements can best be balanced with the need to
prevent the account opening process becoming an obstacle for savers. We
want it to be as simple as possible, but we must ensure that basic
checks are
made.
Dr.
Ladyman: It has just occurred to me that we have
introduced legislation intended to combat money laundering that
requires people to produce certain identification when they open bank
accounts. I advise my hon. Friend to ensure that there is no conflict
between the Bill and the requirements of money laundering
legislation.
Ian
Pearson: My hon. Friend makes a good point. There is no
intention that there will be any such conflict. We will continue to
hold discussions with the banks to ensure that we get the provisions
right. Duplicate
notices may be issued if people lose their first notice. If they find
the initial notice at a later date, they might be tempted to open two
saving gateway accounts. Clearly, that should not be possible. Draft
regulation 13(2)(a) makes it clear that people opening accounts will be
required to declare that they have not opened a gateway saving account
previously. The hon. Member for Fareham, too, raised the issue of
duplication, but I think I have given the assurances that he wants.
There is already a process to ensure that individuals cannot open
multiple individual savings accounts, so we are familiar with this
area. I have no reason to believe that we will not be able to deal with
this matter in a satisfactory
manner. My
hon. Friend the Member for South Thanet made a number of additional
points. We will come on to the reason why non-income related benefits
such as contributory jobseeker’s allowance are included under
amendments 26 and 27, so perhaps he will allow me to leave
the issue until then. I have two things to say on issuing reminders.
First, there is a great opportunity for all MPs to campaign to promote
saving gateway accounts in their communities. I hope that we will
facilitate that as a
Government. 11.30
am We
do not know at the moment what the likely take-up of saving gateway
accounts will be. We obviously want to ensure that it is as high as
possible. We will consider whether to have further notices in future,
but we do not have to include that in this legislation, nor is it an
impediment to making progress on the Bill. If we decide to do so in
future, it will be a policy decision taken in the ordinary way. I take
my hon. Friend’s point that we want to encourage this policy to
be a success: we want people to get into the savings habit, we want to
make it as easy as possible, and we want to remind them of this
opportunity. In that spirit, I hope he will appreciate the flexible way
we are proceeding with the
legislation. Question
put and agreed to.
Clause
2 ordered to stand part of the
Bill.
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