New Clause 2
Saving Gateway Accounts Bill
9:45 am
Stephen Ladyman (South Thanet, Labour)
The hon. Gentleman is absolutely right. This is about teaching people how savings work and how beneficial to them holding these accounts can be in the long term. I hope that they will take that message very seriously.
I return to my core point: I do not want my hon. Friend the Economic Secretary to think that the banks are not getting anything out of this. They are getting something very considerable. They are getting free money to help them to expand their customer base. Any other industry in this country that could make a claim for getting free money to expand its customer base would be falling over itself to get it. We have just had a debate about the car industry, and we are essentially helping the car industry to expand its customer base. I do not see how this is any different. The banks should be doing their bit by making money available.
To come back to the point made by the hon. Member for Taunton, perhaps the banks will want to structure their interest differently, so that someone who puts in their money regularly each month and does not withdraw it in the meantime will get more interest than someone who operates an account by putting in money and taking out money all the time in a way that is difficult to administer. Perhaps someone who puts in a lump sum at the start and keeps it there until the maturity period will get a bigger rate of interest than someone who puts in money differently. There are different ways of structuring the account, but I encourage my hon. Friend to remember, as I am sure that he does, that these accounts are about teaching people the benefits of saving. If we are to do that, the banks, building societies and others should be encouraged to pay interest on the accounts.