Clause 9
6:30 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
I beg to move amendment No. 33, in clause 9, page 5, line 8, leave out paragraph (c) and insert—
‘(1A) Account providers will be required to send statements to the holder at not less than 6 month intervals.’.
I have tabled amendment 33 to reduce the sense of abstraction in the Bill. I share the frustration of the hon. Member for Taunton that we have had to go through the process of tabling probing amendments to be able to tease out some principles and numbers underpinning the Bill, but I suppose that that is how Parliament works. I believe that the child trust fund was established on a similar principle of broad enabling legislation followed by statutory instruments. In fact, next Monday afternoon, I am down to debate a statutory instrument on the child trust fund, which shows, I suppose, that such regulations come up for discussion, from time to time, long after an Act ceases to be a live political issue.
The abstraction that I am seeking to reduce relates to the statements that providers are required to produce for account holders. That cropped up in the evidence session last week when we discussed the frequency of the requirement to produce a statement. Potential account providers talked about six months being an appropriate interval—and lo and behold that number appears in regulations. A balance needs to be struck between keeping consumers informed about their contributions and trying to reduce the cost of the provision of statements. Every time a statement is sent out, there are printing, paper and postage costs, which add to the cost of providing these accounts. For accounts with relatively few transactions, six months does not seem a bad interval for the provision of statements.
A point was raised about whether a statement was necessary and whether alternative ways of providing the information to customers could be found. Adrian Coles, from the Building Societies Association made that point when he gave evidence. He said that a passbook approach might be an alternative to a statement, because it would certainly provide much of the information required—it would provide a balance at any point, show payments in and out of the account, and provide details of the account holder, such as name, address and postcode, and the closing balance on the statement date. The only piece of information that it would miss out, according to draft regulations, is a provisional calculation of maturity payments. If that requirement was not in the regulations, a passbook might be an appropriate alternative to a statement.
The banks made the comment that the more information prescribed in regulation, the more expensive the statement will be, and that a programme to calculate the estimated maturity payment would be needed. In a way, we should be relaxed that banks are big enough to bear some of those costs, but if credit unions were required to provide such information, it might add to their costs and reduce the attractiveness of those products to credit unions. Are the Government clear that six months is the absolute minimum, or could a longer period be used? Might Mr. Coles’s passbook proposal be an appropriate alternative to the provision of a statement?