§ Ms WalleyTo ask the Chancellor of the Exchequer (1) what assessment he has made of the need for savers in the Savings Gateway to be able to access their funds and the Government's matched contribution to meet unexpected needs; [59021]
(2) what estimate has been made of the number of low-income families who will benefit from the Savings Gateway once it is implemented nationally; [58994]
(3) what tendering process was used to award Halifax plc partner status in the four Savings Gateway pilot projects; [59019]
(4) what plans he has to allow investments in the Savings Gateway to include methods of deposit other than cash; [59020]
(5) what role he plans for private sector financial services providers and mutual societies in delivering the Savings Gateway; [58995]
(6) what assessment he has made of the (a) open market model and (b) licensed-provider approach in delivering the Child Trust Fund; and if he will make a statement. [59018]
(7) what criteria have been used to determine the eligibility of families to participate in the Savings Gateway in the pilot areas of (a) Gorton, (b) Tower Hamlets, (c) Cumbria and (d) Cambridgeshire; [59017]
(8) what incentive he will establish for a single service provider of the Savings Gateway to invest in and innovate the service; [59022]
(9) what restrictions will be placed on the use of matured assets in the (a) Child Trust Fund and (b) Savings Gateway; [59024]
(10) what role he plans for private sector financial services providers and mutual societies in delivering (a) deposit capability, (b) investment management and (c) advice and information when managing the child Trust Fund; [59023] 664W (11) what level of redress there will be for children born before the Child Trust Fund's deadline for tax free saving; and if he will make a statement. [58993]
§ Ruth KellyThe Government announced more detailed plans for the Child Trust Fund and Saving Gateway inDelivering Saving and Assets, published in November 2001. This document also raised some questions about the Child Trust Fund for further consultation and announced the Government's intention to pilot the Saving Gateway.
As set out in Delivering Saving and Assets, eligibility for the Saving Gateway is intended to be through a "passport" to an existing working-age benefit, tax credit or measure of income used in a tax credit. The number of people who could benefit from the national Saving Gateway will depend on the exact eligibility criteria chosen. As stated in Delivering Saving and Assets, the Government believes that it is important for low-income savers in the Saving Gateway to be able to withdraw their own savings without restriction, to ensure that they have access to their financial assets in order to meet unexpected needs. For this and other reasons, the Government believes that the Saving Gateway should be a cash-based account, as stated in Delivering Saving and Assets. When a Saving Gateway account matures, it is intended that savers will be able to access the Government's "matched contribution" without restriction. Although methods for making deposits into the Saving Gateway remain to be decided, easy accessibility will be very important. In line with the results from previous consultation, the Government stated in Delivering Saving and Assets that the optimum model for delivering the Saving Gateway would be for a single provider, ideally with a branch network. Such a provider might be either a single financial services or a consortium of providers operating in some form of partnership. Decisions on the respective roles of the private sector, including mutual societies, and arrangements to encourage innovation have not been taken.
Pilots for the Saving Gateway are being established. They will be used to test aspects of the delivery of the Saving Gateway. The pilots require the involvement of a financial service provider with branches to operate the accounts. The Government raised this issue with the British Bankers Association and Building Societies Association, and requested these organisations to ask their members to indicate whether they would be interested in participating. After discussions with a small number of potential partners, the Government accepted an offer from Halifax to provide the required branches, branch staff and account management systems for the pilots. Eligibility for savers to participate in the Saving Gateway pilots in the areas selected will be based on criteria reflecting the intention for the national Saving Gateway to be available through a "passport" to an existing working-age benefit, tax credit or measure of income used in a tax credit.
In Delivering Saving and Assets, the Government states that it sees a key role for private sector financial service providers, including mutual societies, in delivering the Child Trust Fund, including aspects relating to financial education. The document presents two options for the involvement of financial services providers: open market competition and a licensed provider approach. Consultation on these two different models is now closed and the Government will be reporting back on the results of this consultation, including an analysis of these options, 665W in due course. Delivering Saving and Assets indicated that the Government does not intend that the use of assets from a maturing Child Trust Fund at maturity will be restricted. The Government has not taken any decisions about arrangements, if any, for children born before the launch of the Child Trust Fund. Most children in the UK are not liable for income or capital gains tax because they do not earn incomes, from saving or other sources, to take them above the relevant thresholds. Parents can currently save on behalf of their children in a variety of tax-advantaged ways.