Stephen Ladyman (South Thanet, Labour)

I beg to move amendment 20, in clause 13, page 6, line 8, leave out ‘may’ and insert ‘must’.

Good morning to you, Mr. Taylor and to other members of the Committee. I shall not detain the Committee long. I tabled the amendment because I wanted to explore the Economic Secretary’s attitude to whether these accounts should pay interest. If you will give me the leeway to refer also to amendment 21, it will not be necessary for me to move it subsequently.

David Taylor (North West Leicestershire, Labour)

I am happy to allow that flexibility.

Stephen Ladyman (South Thanet, Labour)

Amendment 20 would make it compulsory for these accounts to pay interest. If we wanted to stop some bank paying a nugatory level of interest it would be necessary to include in the Bill the minimum level of interest that could be paid. That is where amendment 21 would come in.

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

Will the hon. Gentleman clarify this for me? I looked at the amendment and was slightly perplexed. Clause 13 refers to interest payable to the commissioners, not to interest payable on saving gateway accounts. So his amendment would provide that a payment be made to the commissioners rather than that interest be paid on accounts.

Stephen Ladyman (South Thanet, Labour)

The hon. Gentleman may be right and I may have misread the clause. My purpose was to explore the Government’s attitude to whether these accounts should provide interest to the saver. That is what I hope the Economic Secretary will refer to.

One of our expert witnesses told us that they regarded it as essential that these accounts should pay interest to the saver because otherwise the saver would not become inculcated with the idea that money put into a bank account earns interest. Another expert witness told us that these accounts would generate a market of around £250 million. If the banks used that money for their personal loan businesses—

David Taylor (North West Leicestershire, Labour)

Order. The impact of the clause may have been misunderstood. The apparent objective might well be secured by moving an appropriate amendment to new clause 2, which deals with this issue.

Stephen Ladyman (South Thanet, Labour)

That may well be the case. If the Economic Secretary indicates that my amendment is ill founded and will not serve the purpose that I hoped it would, I will certainly accept that and withdraw it.  Perhaps in telling me that he will still indicate whether he believes that the accounts should pay interest. If he will take into account my point that these accounts are likely to raise sufficient profit for the banks to make about £21 million. That is more than enough for them to—

David Taylor (North West Leicestershire, Labour)

Order. I am sorry to interrupt the hon. Gentleman yet again, but we are on clause 13, which refers to interest payable to the commissioners, not to the depositors. If he wishes to return to his remarks when we debate new clause 2 the Chair will be quite content.

Stephen Ladyman (South Thanet, Labour)

I understand what you are saying, Mr. Taylor. I have concluded my comments. I have raised the issue that I want to raise and I hope that the Economic Secretary will find either now or under new clause 2 the opportunity to respond and give us an indication of whether he thinks these accounts should pay interest to the saver.

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

Good morning, Mr. Taylor. It is a pleasure to serve under your chairmanship again today. I can confirm that amendment 20 relates only to interest being paid on amounts owed to Her Majesty’s Revenue and Customs. The effect of amendment 21 would be to make saving gateway accounts inconsistent with what happens elsewhere in HMRC.

My hon. Friend rightly wants to have a debate about the general principle of interest and whether or not it should be paid on saving gateway accounts. We can have that debate when we come to new clause 2. There have been extensive discussions between the Government and potential account providers about that issue. I will say more on it at a later date.

Stephen Ladyman (South Thanet, Labour)

I have no further comments to make. I beg to ask leave to withdraw the amendment.