Examination of Witnesses (Questions 36
- 39)
WEDNESDAY 21 OCTOBER 2009
MS JANE
PLATT AND
MR STEVE
OWEN
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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