Saving Gateway Accounts Bill

The amendment concerns account holders’ savings being covered by the Financial Services Compensation Scheme, and account holders’ access to the Financial Ombudsman Service. I can assure Members of the Committee that, under the powers already in the Bill, we intend to make it a requirement of the scheme that all saving gateway accounts are covered by the Financial Services Compensation Scheme or a similar deposit guarantee scheme recognised in an EEA member state. All deposits of up to €100,000 will be covered. As Members of the Committee will no doubt know, the Financial Services Authority is currently consulting on the Financial Services Compensation Scheme. As part of that consultation, it is stimulating a debate about a significant increase in the level covered, as well as some of the issues that we touched on in considering the Banking Bill, around brands and other issues, where there is still some complexity and uncertainty. The issue of EEA member states and the deposit protection provided is a matter of some concern for the Government. My right honourable friend the Chancellor of the Exchequer has raised this with the European Commission. Later today I will be going to Prague to attend the ECOFIN meeting, and I will be raising this matter with those attending. These concerns about the strength of the deposit guarantee schemes are exercising minds in a number of locations, have been touched on recently in speeches by senior officers of the FSA and are referred to tangentially in the de Larosière report produced for the President of the EU Commission. In addition, I can confirm that all accounts operated in the UK will be covered by the ombudsman scheme, without the need for additional provision in the Bill or regulations. As with other accounts, such as ISAs and the child trust fund, as long as a provider has appropriate permission to accept deposits, there is no need to exclude them from offering the saving gateway. We do not intend to place a restriction on non-UK providers, but I add a caveat to that in reminding the Committee that the Chancellor of the Exchequer has expressed some serious concerns about the cross-border operation of the deposit guarantee schemes. We will no doubt be saying more about that in due course, having discussed these matters with member states of the European Community. I hope that the noble Baroness will agree that there is no need for this amendment, and will therefore withdraw it.