Administration and expenditure of the Chancellor's departments, 2008-09 - Treasury Contents

Examination of Witnesses (Questions 36 - 39)



  Q36  Chairman: Jane Platt, can I welcome you back to the Sub-Committee. Could you formally introduce yourself and your colleague, please?

  Ms Platt: Certainly. My name is Jane Platt. I am Chief Executive of National Savings and Investments and the Director of Savings, and this is my colleague, Steve Owen, who is Director of Channel Delivery and Management.

  Q37  Chairman: We have about thirty minutes for this session, because we want to squeeze in the Royal Mint, before our vote. Your vision is to provide guaranteed savings for customers, but your mission is to raise cost-effective finance for the Government. Has that conflict got worse over the last year?

  Ms Platt: Over the last year we have certainly lived through some exceptional times as we have dealt with the flight to safety post the Lehmans crisis in the autumn and over that period it has been very important to us to balance the interests of: our customers, of the Government in the form of net financing, and financial stability. So in fact over that period our key remit of raising cost-effective net financing has been reinforced, but so has the importance of us behaving straightforwardly and honestly with our customer base.

  Q38  Chairman: But what criteria do you use to determine a fair rate of interest for your customers?

  Ms Platt: In terms of determining our pricing, we look at a number of things. We look at our position in the competitor tables, we look at base rates and we look at the amount of net financing that we need to generate. So we calibrate these things, bearing in mind, of course, the need to make sure that we behave appropriately at a time when the banks and building societies are rebuilding their balance sheets to make sure that we have a suitable blend of rates across the various products that we market.

  Q39  Chairman: You mentioned the flight to safety, but you ceased discretionary marketing during the autumn and winter. Why was that? Why did you not want to encourage additional funding?

  Ms Platt: In August of last year we were on track to be raising 4 billion of net financing for the Treasury, which was the agreed amount we had set off to raise. After the Lehmans crisis it was very, very clear that we were going to be receiving a large volume of unsolicited funds coming into NS&I, and at that point we had to make a decision. Do we stay open for business and allow net financing to rise very well above the amount we had previously agreed, or should we actually stop not only marketing our products but also allowing people to invest in them? We took the decision with the Treasury that we should cease all discretionary marketing but stay open for business and I think that NS&I and its operating partner, Siemens, did a marvellous job in the face of huge unsolicited volumes in staying open for business. Our contingency plans worked, staff cancelled their holidays, they did extra shifts, they really "busted a gut" to be able to make sure that we offered a good service to customers. Because you could imagine what would have happened if NS&I had not been open for business at a time when people were so concerned about their savings. I was up in our call centres just very shortly after the flight to safety and listening to people of all ages, some of them in tears, talk about how concerned they were about the safety of their savings. And of course NS&I's call centres are staffed by people who generally have some 22 years of experience and they were able to calm people down at a time when emotions were running very high. So I think that NS&I has really proved itself as the cornerstone, a robust cornerstone, of the savings market in an extraordinary time.

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