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The hon. Gentleman touches on a real dilemma. The assumption is that the banks will contribute to that process. However, there is much evidence to show that they are not enthusiastic about that—to say the least. It costs them between £60 and £70 a year—that is not the customer service charge—to run such an account. An account is viable for the banks only when it contains a minimum of £1,300, and they have made it clear that they are not really interested in running those basic accounts.
If the Government have any doubts about that point, they should consult the useful blind study carried out a couple of weeks ago by the consumer panel of the Financial Services Authority. It investigated how people shop around between banks and found that only one of the 10 banks even mentioned a basic bank account. Four in 10 people who tried to open a bank account were turned down with no reference to the fact that the basic bank account was on offer. The banks are not interested in the scheme; they do not want to undertake it but they are being pushed into it—that is where the scheme will fail.
Why should the banks be involved? Why have they undertaken to give that service, even though they are reluctant to provide it and their customers are reluctant to take it up? I suspect that it has something to do with some of the points under discussion yesterday in the Select Committee on the Treasury. A group of bankers were interviewed about the Cruickshank report and so-called excess profits in the banking system.
I suspect that the banking community was very worried two years ago that the Government would propose tough regulation through Paycom and perhaps even a windfall tax on the banks. The Government promised to do that, but it never happened and the pressure is now off the banks, as was reflected in the somewhat arrogant tone that their representatives adopted during yesterday's Treasury Committee sitting. The banks are now in a much stronger position in dealing with the Government, but that explains why that process was once encouraged. However, it is difficult to understand how the basic bank account system can accommodate the needs of that substantial group of people.