Jeremy Browne (Taunton, Liberal Democrat)

I beg to move amendment 3, in clause 2, page 2, line 6, leave out paragraph (a).

John Bercow (Buckingham, Conservative)

With this it will be convenient to discuss amendment 23, in clause 2, page 2, line 12, at end add

‘The expiry date is either three months after the issue of a notice of eligibility or cessation of eligibility as defined in section 3, whichever is earlier.’.

Jeremy Browne (Taunton, Liberal Democrat)

The territory here is similar to that which concerned the amendments that I tabled to the previous clause. Clause 2 will require HMRC to issue a notice of eligibility to each person who qualifies under clause 3. The crucial point to draw out with the amendment is the requirement that the notice of eligibility should include an expiry date. If one is eligible, one continues to be so until eligibility ceases. Unless one can see into the future, the expiry date would not necessarily be an accurate prediction of eligibility.

For example, if one were to leap forward to clause 3, one of the eligibilities is severe disablement allowance. One can imagine that unless an amazing cure were invented in the meantime, that allowance would continue beyond the recorded expiry date. However, eligibility for jobseeker’s allowance may not. The Economic Secretary clarified that that would continue for the whole period; even if one were only eligible for a day and then became employed as a premiership footballer on £70,000 a week, one would still be eligible for the remaining two years to draw this very generous support from the taxpayer.

Some of the criteria, however, would be permanent. An expiry date in those circumstances may create an extra administrative burden on the people who would have to reapply, or who may allow their eligibility to lapse unwittingly. They would then have to demonstrate their eligibility again, even though they were claiming on the same basis as the first time around.

The point is one of ease of access for people who may be disinclined to partake in such initiatives and incentives. It would not be desirable to put extra barriers in their  way; we all share the same objectives. If people are eligible to start a saving gateway account, it does not necessarily need to be made clear when they may or may not cease to be eligible in the future.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I add my welcome for your chairmanship, Mr Bercow, to the welcomes offered by other hon. Members. I want to speak to my amendment 23, which looks at the question of when the eligibility notice expires and is very much probing. Clause 2(2)(a) states that there will be an expiry date, but that date will be specified in regulations. Of course, the amendments were tabled before the regulations even appeared in the Vote Office yesterday.

Our suggestion here is that the expiry date be either three months after the date of issuance of the eligibility notice or cessation of eligibility, as set out in clause 3, which specifies the benefits that someone is entitled to, which then triggers their eligibility—whichever is earlier. I am trying to set out a sensible parameter for the expiry of the notice and I suggest three months; it may take someone a while, once they become eligible for benefits, to decide whether to open a saving gateway. They may need to consider whether their income would enable them to save £25 a month, or whatever amount happened to be specified. Perhaps there should be a reasonable period in place before the expiration of the notice and perhaps people would then have an incentive to think about it, rather than leaving things until the latest possible moment.

Also, considering the other qualifications on cessation of eligibility, once someone stops being eligible for a benefit, surely they should stop being eligible for a saving gateway. We touched on that topic when we debated the previous clause. That is the thinking behind amendment 23.

Stephen Ladyman (South Thanet, Labour)

Again, I have just a few questions for my hon. Friend the Economic Secretary. Is it envisaged that the expiry date of one’s eligibility notice will be short term—a month, perhaps—or will it be longer term? If one’s eligibility for the saving gateway continues after the expiry date, will another eligibility notice be issued? For example, if someone has a three-month expiry date and is eligible for a saving gateway account for 12 months, will they get four notices in that period? Will there be a process in place to ensure that people get a notice immediately on the expiry of their old notice or will there be a gap between the two?

John Howell (Henley, Conservative)

It is good to sit under your chairmanship once again, Mr. Bercow. I want to raise a point in relation to clause 2(2) on the notice of eligibility. We are talking about a number of aspects relating to the expiry date. Is this the right occasion to ask the Economic Secretary whether this is a good place to ensure, as it is not in the regulations, that there is also a health warning on the notice of eligibility as to what happens in the event of withdrawal? There seems to be no other place for that aspect to be rammed home at the beginning, given the somewhat chaotic lives of some of the people who would be eligible for the account.

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

Clause 2 deals with the notices of eligibility that HMRC will send to eligible people. The amendments tabled by the hon. Members for Taunton and for Fareham are very different, so let me deal with them in turn. Amendment 3, which stands in the name of the hon. Member for Taunton, would remove the need for the notice of eligibility to contain an expiry date, along with any other information about the participant that was set out in the regulations. Obviously, it is essential that notices of eligibility contain information about the eligible person—for example, their name and address. This will allow account providers to carry out their account-opening checks and prevent those who are not eligible for the scheme from opening an account using a notice issued to another person. However, going by the hon. Gentleman’s comments, I strongly suspect that his main point is about the expiry date.

Considering the amendment in isolation, its impact would be that once the notice of eligibility had been issued it would be valid indefinitely. That would mean someone who was at one point eligible for a saving gateway account could open their account at any point in the future, regardless of any change in their tax credit entitlement circumstances. That is clearly undesirable. Including an expiry date on a notice of eligibility is essential to ensure that eligibility for the saving gateway account is targeted on working-age people on lower incomes, rather than people who were in that group in the past.

As I explained to my hon. Friend the Member for South Thanet, it is certainly our intention that those who are eligible and who take up the saving gateway within the three-month period, even though their circumstances might have changed, should still open an account. However, we do not think it is a sensible approach to say that the notice of eligibility would last for all time and that in five, 10 or 20 years a person would be allowed and be eligible to open a saving gateway account.

Amendment 23, which stands in the name of the hon. Member for Fareham, provides that notices of eligibility would expire after three months, or when the holder of the notice ceased to be an eligible person. Again, let me say that our intention is to provide in regulations that all notices of eligibility will have an expiry date of three months from their date of issue. However, we do not believe that that should be put in the Bill.

Our intention is that the notice of eligibility should contribute to the simplicity of the scheme for account applicants and account providers. Where an eligible person receives a properly issued notice, we believe that they should be certain that that entitles them to open an account with an approved account provider until the expiry date printed on the notice—provided that they have the necessary connection with the UK.

We believe that account providers and eligible people will welcome that approach. It provides certainty and should minimise the number of accounts that are opened wrongly, as well as allowing people to plan ahead and consider when they should open an account. However, if amendment 23 was agreed to, the change in circumstances could mean that that person was no longer eligible to open an account. In other words, a person who wanted to open an account would need to be eligible not only at  the relevant date, which we have just discussed in relation to clause 1, but at the date on which they opened their account.

We considered that aspect carefully and decided against it. If individuals were required to be eligible at account opening, that would obviously need to be confirmed in some way. It would also not be possible for the account provider to check with HMRC, because the saving gateway database will not have a real-time record of people’s entitlement to qualifying benefits and tax credits. As I indicated to my hon. Friend the Member for South Thanet, the information will be transferred periodically. That will be done regularly—probably fortnightly or monthly, but not in real time.

Therefore, if we were to accept the proposals tabled by the hon. Member for Fareham, we would have to introduce a new bureaucratic system to ensure that people were eligible on the date that they opened the account. It would not be available then to people who were eligible at a particular time.

The other approach would the individual needing to self-certify their entitlement to one of the qualifying benefits or tax credits. Self-certification could also mean accounts needing to be disclosed if HMRC later found that someone had opened an account when no longer eligible to do so. Again, that would place additional burdens on account providers. We are very keen indeed to minimise the burdens placed on those who intend to offer saving gateway accounts.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

I am grateful to the Economic Secretary for his explanation and I understand his point about the administrative convenience of having, say, a three-month eligibility period before the notice expires.

What assessment has the Economic Secretary made of the proportion of people opening an account who will no longer be eligible for the benefits set out in clause 3? I am not sure whether dead-weight cost is the right phrase, but there is a big cost there for people who are not eligible for the benefits, but who are, due the three-month period, eligible to open a saving gateway account and perhaps are not in the low-income categories that the Bill targets.

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

That is a perfectly valid point for the hon. Gentleman to raise. The work that we have done suggests that there will clearly be some people who are in that category, having moved off qualifying benefits in the period before the notice of eligibility is received by them. We do not think that those numbers are likely to be very high. We believe that the people that we are talking about, who might have moved off those qualifying benefits, are those we would generally want to target anyway. While it is true that some people might move out of entitlement, we estimate that that will be the case in about 4 per cent. of the accounts that are opened. It is not a significant figure.

Jeremy Browne (Taunton, Liberal Democrat)

I would like to follow on from the point made by the hon. Member for Fareham. Does the Economic Secretary envisage that people who, for example, do seasonal work—where they are perhaps quite well paid for nine or 10 months of the year, but then do not work for the remaining two or three months—may see this as an enticing way to bulk up their savings by  qualifying during the period when they are not working, even though their earnings during the year would make them far too wealthy to qualify in any other circumstances? Have I misunderstood? As I understand it, they would be eligible to put their names forward so long as they were claiming benefits during the short period of the year when they were not working for seasonal reasons.

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

If people are on a qualifying benefit, they are entitled to open a saving gateway account. We have to remember that we are trying to encourage people who are working but are on relatively low incomes to save for the future. It is entirely appropriate that seasonal workers, who might spend some time on qualifying benefits, should have the opportunity to have a saving gateway account.

George Mudie (Leeds East, Labour)

I am taking the opportunity to ask a question. I want to follow on from the Economic Secretary’s first contribution about the inefficiencies of HMRC, which we have found on many occasions. If a qualifying individual turns up at their MP’s surgery and says, “I did not receive a notice, I have just heard about it,” will the Department give that individual a fresh date, provided that they are suitably qualified?

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

Specifically on that question and the question raised by my hon. Friend the Member for South Thanet, as we made clear, the expiry date on the notice will normally be three months after it is issued. We think that that is the right period for people to be able to access an account. We do not intend that there will be an automatic repeat notice when that three-month period expires if somebody has not opened an account. We do not want to keep bombarding people with pieces of paper, but people who are still eligible can request new notices if they want to open an account and there will be publicity about saving gateway accounts because we want to encourage take-up. We will also have the flexibility to allow us to issue repeat notices, if at some point in the future we decide that we want do so. We think that that is a sensible thing to do.

Stephen Ladyman (South Thanet, Labour)

I am grateful to my hon. Friend for that answer. I want to take him back to the issue of people who move off eligible benefits. Is it his intention for the gap between when somebody goes on to eligible benefits and when they receive an eligibility notice to be used for targeting the accounts on those who are not on benefits for only a short time? In other words, if it was a month before somebody got their eligibility notice and they were out of work for only a week or two, they would not receive a notice in time to open an account. Is it the intention deliberately to use that gap in some way to try to limit the people who might access it?

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

No, it is not our intention deliberately to use that gap in the way my hon. Friend suggests. We are planning to adopt the process of a data transfer of names of eligible people from the DWP to HMRC, which we expect to happen fortnightly or monthly. Some people who are eligible according to DWP records will have moved off in the period before HMRC issues  the notices and we estimate that figure to be about 4 per cent. We think it reasonable for those people to be eligible to open a saving gateway account. Given the administrative complexity involved, we do not think it sensible to prevent them from opening an account, which is, in effect, what the amendment tabled by the hon. Member for Fareham would do. The overall eligibility criteria are well targeted and the Committee heard in evidence what our intentions are and that the Bill has widespread support.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

Following on from the point raised by the hon. Member for South Thanet, may I have clarification of whether everyone who claims JSA, for example, will receive a notice of eligibility, even if they move off that benefit in the processing time between when they register and when the information is passed on to HMRC? Therefore, will everybody who claims JSA receive a notice of eligibility, even if they are on the register for only a week or a few days?

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

I understand that that will depend on the time between when the DWP transfers information and when HMRC receives it. Somebody might sign on and claim JSA with the DWP, but get a new job extremely quickly and therefore remove themselves from the record, so their information would not be transferred. It is likely that an estimated 4 per cent. of people whose names are on the transferred DWP data will have a notice issued by HMRC but will have moved on in that time. I hope that that clarifies the situation.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

To be absolutely clear, the Economic Secretary is saying that a snapshot will be taken of the people claiming JSA when the data are transferred from the DWP to HMRC. If a person has moved on between one snapshot and the next, and is no longer eligible for JSA, that will not be picked up.

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

That is certainly my understanding of how the system will work. We have been talking about transferring data regularly—fortnightly or monthly—and few people will fall into that category. The bigger category will be those who have been frictionally unemployed and have moved from qualifying benefits into the mainstream labour market where they do not qualify. That is a relatively small number of people, but we still believe it right that they should be entitled to open saving gateway accounts.

Jeremy Browne (Taunton, Liberal Democrat)

The point made by the hon. Member for Fareham is important, or will at least be thought of as important by those who come across other people whom they feel are being treated differently from them. Let us say, for the sake of argument, that person A has been eligible for JSA for a fortnight and then finds another job. Person B has also been eligible for JSA for a fortnight and then finds the same job—they are working together—but person A happens to come at the point in the cycle at which HMRC is processing that information and is therefore able retrospectively to apply for a saving gateway account because he got the letter, even though he is doing the same job for the same pay as person B.

Person B will ask why he cannot retrospectively save for the next 102 weeks, or whatever it is, at the generous 50p matching rate and we will have to say, “Sorry, HMRC did not process you in the same way.” That will cause people to come to our constituency surgeries asking why person A is being treated differently from person B, will it not?

Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

George Mudie (Leeds East, Labour)

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 (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

George Mudie (Leeds East, Labour)

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 (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

Jeremy Browne (Taunton, Liberal Democrat)

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.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

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 (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

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.

Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

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?

Stephen Ladyman (South Thanet, Labour)

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.

Jeremy Browne (Taunton, Liberal Democrat)

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?

Stephen Ladyman (South Thanet, Labour)

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 (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

Stephen Ladyman (South Thanet, Labour)

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 (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

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.

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.