Clause 4
12:30 pm
Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
These are obviously matters of judgment. From the experience of the pilots and the interviews conducted, and discussions with interested parties, we concluded that two years was the most appropriate time period. That account duration will best help potential account holders to open an account and kick-start a saving habit. It strikes the right balance between giving people sufficient time to develop a saving habit and build up a reasonable match, and allowing them access within a sensible time scale.
Clearly, the participants on the 18-month trial had a range of views about the appropriate length: some were in favour of extending the period beyond 18 months and some thought that it should be less. Annuality makes sense because people generally understand the date when they open something and the date when it is likely to mature. Of course, we want to evaluate the policy when it is implemented, but at the moment we think that two years is appropriate and that it strikes the balance we are trying to achieve.
We do not believe that the amendment, which says that the maturity period should never be shorter than two years, is appropriate, because we might find that, for a significant group of people, that saving habit can be kick-started in a shorter period. It should not be put in the Bill, but I appreciate that it is a probing amendment to explore our thought processes. I hope that my comments this morning clearly outline to the hon. Gentleman and to the Committee why we have chosen a period of two years.