Saving Gateway Accounts Bill

I shall speak also to Amendment 23. Both amendments would amend Clause 4 and set out in primary legislation some basic financial rules about the burdens on account providers. Amendment 22 states that regulations made under Clause 4 may not require an account provider to pay interest. The British Bankers’ Association is especially keen on that. It acknowledges that the draft regulations do not require the payment of interest, but says that it would value the certainty that having that in the Bill would give. The problem that banks foresee is that they might be persuaded to be saving gateway account providers on the basis of the draft regulations only to find, having invested in participating in the scheme, that the regulations are changed—whether before the final version is issued or sometime thereafter. Banks, like other businesses, need certainty to plan on anything other than a short-term basis. My amendment does not prohibit the payment of interest, although I think it is highly unlikely that any account provider would find it economic to pay interest, whatever the level of interest rates. I am aware that Citizens Advice believes that interest should be paid to make the account like a proper savings account, but the economics of starter savings accounts are unlikely ever to make that a realistic prospect. If there were a competitive market where people wanted to attract that source of funds—about which the Minister was optimistic at Second Reading—account providers may need to offer interest to attract funds, but they do not want to be obliged ever to have to provide interest. That is why they seek to have that hardwired into the legislation. Amendment 23 addresses the other side of the coin. It prohibits the account provider from making charges. The regulations provide for no charges to be made against the saving gateway account. We have no problem with that, but if account providers are not to be allowed to levy charges on the accounts, it seems to us to be fair and reasonable that there should be no interest payable either. As I sought to put the interest rate provision in the Bill, for even-handedness’s sake, I have also sought to put the other side of the equation, the cost side, in the Bill. The main purpose of my two amendments is to raise the issue of interest, which seems to be a stumbling block towards banks wanting to take part in the scheme. As I said, that is something that they continue to express concern about. That is why I have raised it in Committee today. I beg to move.