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Saving Gateway Accounts Bill

Would it not be absolutely marvellous if that happened? We will watch with great care. Let me point out in passing that the decline in the savings rate is not something that everyone has noticed just recently. It has been going on for some time, and Conservative Members have been identifying its dangers and calling for it to stop for a great many years. On 18 November 2002, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) said:"““The savings ratio is forecast to fall this year to the lowest level ever recorded.””" That comment is obviously out of date, as the ratio has become even lower since then. He went on to say:"““Meanwhile, borrowing has risen, with household debt at record levels. Far from alleviating this problem and encouraging people to save, the Chancellor has done precisely the opposite.””—[Official Report, 18 November 2002; Vol. 394, c. 406-7.]" On 19 April 2004, my right hon. Friend the Member for West Dorset (Mr. Letwin) said:"““On current trends, household debt will break though the £1 trillion barrier this autumn. For increasing numbers of people, debt is becoming a serious problem””." In other words, this is not news; it has been going on for a great many years. The Government have ignored the problem for far too long. Now we are now at the very bottom of a recession, and if anything, demand rather than saving needs to be stimulated at this point in the economic cycle; but now—too late—we have been given savings measures. They are welcome, but my goodness, we could have done with them five years ago, seven years ago, or perhaps even before that. It should also be pointed out that these measures are comparatively narrow. They will help an important group of people and, we hope, will broaden the savings culture, but whole groups of people will not be helped. I am thinking particularly of a whole generation of pensioners who may have done the right thing during their working lives by putting something by for a rainy day or to ensure that they are financially independent and can stand on their own two feet in retirement, rather than relying on political whims or the largesse of Ministers of whichever party. Those people have seen the income from their savings drop like a stone, for obvious reasons. We have all seen the rates of interest that are being offered falling very rapidly over the past few months. The danger is that those people who have saved and done the right thing throughout their working lives and now have little income to show for it see that other people who have not behaved as well are getting benefits from the benefits system to a fairly large degree that help to bail them out, even though they did not save during the previous 20 or 30 years. For those people who have saved, the comparison is very stark. They have tried to put something by and have scaled back and reined in their spending, during their entire working life in some cases. The people who live next door who did not put something by and enjoyed the fruits of their labours, spending all the money as it came in, are getting more in benefits than those who have saved. The implication is that the only logical thing for people who have saved to do is ask themselves what on earth the benefit was of spending 20, 30 or 40 years of their working lives scrimping and saving.