The Government want to encourage people to save more and that is why we have taken the tough decisions necessary to create a climate of low inflation, economic stability and an end to boom and bust. Those are the conditions that will encourage people to undertake long-term saving and improve their security.
The verdict of the professionals in the savings industry is that ISAs are more expensive and more bureaucratic than PEPs, and less generous. ISAs are not attractive to those on modest means, which is why Marks and Spencer and Sainsbury have refused to sell them over the counter in their supermarkets. As the decline in the savings ratio is especially acute among those who are less well off, will the Minister agree to publish and place in the Library a savings ratio disaggregated for each of the income groups and then explain to the House how she will encourage the less well-off to save, because ISAs are clearly failing?
Contrary to what the hon. Gentleman suggests, ISAs are clearly set to be an enormous success. I note that in the entire first year in which the previous Government introduced PEPs, 250,000 were sold. One provider alone has already sold more than 250,000 ISAs in the first week since their introduction. We have nearly 400 companies signed up to sell ISAs. National Savings, which was banned by the Conservative Government from selling TESSAs, will be able to sell ISAs through the Post Office as well as through the post. The hon. Gentleman may have observed that the Co-operative bank announced yesterday that it will offer ISAs and make them available at supermarket tills in precisely the low-income communities where we want to encourage more people to take advantage of tax-free savings.
As my hon. Friend has said, the Government want to make ISAs successful among those lower income families who are the people we need to encourage to save. All the publicity for PEPs and TESSAs in the past few weeks will have soaked up some of the money that may have been available for savings schemes. Does my hon. Friend agree, therefore, that we need to give ISAs a reasonable amount of time before we can judge their success? I am sure that, in 12 months' time, my hon. Friend and my right hon. Friend the Chancellor of the Exchequer will be able to say that it has been a successful scheme for lower income families.
I am grateful to my hon. Friend for those points. He is right to say that the majority of savings schemes are sold in the last few months of the tax year rather than at the beginning of the new tax year. That is another reason why the take-up of ISAs in the first week of their introduction is so very encouraging. We know that the lock-in period that was one of the conditions of TESSAs was one of the biggest barriers to putting money into savings, especially for lower income people. People want to know that they can get at their savings when they want them, and they want to be sure that there are no nasty surprises or excessively high charges hidden in the small print. That is why we have introduced the cost access terms—or CAT—standards for IS As, to ensure that they offer fair charges, easy access and reasonable terms in which people can have confidence.
I put it to the Minister that the demand for ISAs at the beginning of the new financial year is substantially down on the demand for PEPs and TESSAs in the same period last year. In addition, although it is not directly a Treasury area, the uncertainty in pension arrangements between now and 2001 and the introduction of stakeholder pensions is causing a vacuum in pension saving. If one takes together the potential decline in new pension schemes and the lower accumulation in ISAs than obtained in PEPs and TESSAs, I do not see how the savings rate will rise; rather, it will continue to decline.
The hon. Gentleman has done nothing but abuse ISAs ever since we announced the plans for them. I regret that he seems to have a vested interest in seeing them fail. On the contrary, we are confident that they will be extremely successful, as the take-up in the first week has already shown.
The Financial Services Authority has just published guidance to providers on how to advise people to make appropriate provision for their pension savings in anticipation of stakeholder pensions. As the hon. Gentleman will know if he has read the consultation document on stakeholder pensions, we will ensure that millions of people on middle incomes, for whom personal pensions have been, in most cases, a disaster because of the charges that were imposed by providers, will in future have access to a low-cost, secure form of provision through the stakeholder pension.