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Saving Gateway Accounts Bill

As it is outside the scope of the Bill, I shall gloss over that one, but it perhaps illustrates a wider principle that this is part of a long and glorious tradition of the Conservative party proposing ideas that are rubbished as absolutely useless by the Labour Government, who after a decent period of time proceed to swipe the idea and relaunch it, suitably renamed—and here we are today. It would be churlish, however, particularly given that the Minister mentioned that the idea appeared in the Labour manifesto of 2001, to carp or cavil too much about its origins. It is clearly a good one and I am pleased to say that everyone has now got around to supporting it at the same time and in the same way. Everyone is now on side in saying that this is a good Bill that is worth supporting. The Bill is so good that I would urge Ministers to go a little further. As my hon. Friend the Member for Fareham (Mr. Hoban) pointed out, it is good as far as it goes, but there is much more to be done to improve the habit of saving in British society. My hon. Friend provided some fairly dreadful examples of how the savings rate has fallen dramatically and precipitously over the last 10 years. Clearly, that needs to be turned around as fast as possible. The difficulty is that this measure should have been introduced many years ago. The problems have been happening for 10 years and now we are at the bottom of the cycle—at least we hope we are—and we are talking about increasing the savings rate when we should be seeking to improve demand in the economy. We are talking about a measure that, at this precise moment in time, would be pro-cyclical rather than counter-cyclical, so the right point to introduce the Bill would have been almost any time during the last 10 years, apart from today. At almost any time during the last 10 years apart from today, we have had a Government presiding over an economy that has been overheating, largely on the basis of a debt-fuelled consumer-led bubble. The result has been rapidly expanding asset prices, particularly house prices—the impact on them has already been mentioned—and an economy that has increasingly lacked the sound economic fiscal foundations, in terms of both Government and consumer debt, that we see in other economies that are better prepared for such downturns. It would have been far better to encourage the savings rate, or even prevent its decline, at any point in the last 10 years. According to the Government's projections, the current recession will end in the third quarter of this year, starting in July. I venture to suggest that if those projections are in any way over-optimistic—I have to tell the Minister that almost everyone outside this place agrees that they are far too rose-tinted—and if, perish the thought, the recession continues after July and into the early part of next year, there will be a danger of our starting to create the right savings culture at a time when the economy is only just starting to climb out of the recession. Although I do not believe that the measures in this particular Bill will be macro-economically large-scale enough to make a impact on the savings rate, it will nevertheless be important for the Government to introduce a series of measures that increase the savings rate both substantially and at the right time, which I fear will arrive not this year but once the recovery of the economy is firmly under way, which may not be as soon as the Government would like.