Clause 5
12:45 pm
Stephen Ladyman (South Thanet, Labour)
The hon. Gentleman makes an extremely good point. Again, that emphasises why I want the Economic Secretary to confirm that the only approved providers of these accounts will be those that are regulated in such a way that access to such protections exists.
The second part of the amendment, in which I have broken down various organisations that might provide these accounts, is there to give my hon. Friend the Economic Secretary the opportunity to say whether he intends to be permissive in allowing organisations to provide these accounts, or whether he is intending to use the provision of these accounts for other purposes.
One of the things that struck me in the evidence-taking session was the apparent reluctance of the banks and building societies to provide such accounts. They seemed to be taking the attitude that the job of creating new business for them is not theirs, but the Government’s. I regard encouraging people to save and to become prudent with their finances as the job of the people who provide accounts. When the supermarkets wanted to encourage people into their shops, they ran loss leaders to encourage people to use them. The banks seem to have no such ambition to encourage people to save. Indeed, they do the very opposite by providing the best rates of interest to the people with the most money, while providing no additional services to encourage people on low incomes to save. They are clearly reluctant to get into this market. I recall the difficulty that the Government had in making them provide basic accounts for people on low incomes—they almost had to dragoon many banks into providing them.
If the banks are reluctant to provide these accounts, why do not the Government use this scheme to encourage certain people, perhaps by restricting these accounts to post office counters? Why not provide an extra opportunity for local post offices to thrive by saying that they are the only place where people can get these accounts?