Savings (Government Contributions) Bill

Lisa Cameron Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons & Ways and Means resolution: House of Commons
Monday 17th October 2016 Commons Chamber

[David Morris (Morecambe and Lunesdale) (Con)]

It is a pleasure to follow my hon. Friend the Member for Gloucester (Richard Graham). I am sure the Bill covers the self-employed, but that has not been brought up today. When I was self-employed 20 years ago, the then Government made a change to taxation which basically meant that a substantial amount of every pound that I put into my pension pot was taken out in cash, so I stopped paying into a private pension. The policy in front of us today proposes a break in that sort of behaviour, particularly for the self-employed. The self-employed have always been worried about the harmonisation of national insurance contributions. When I was the Prime Minister’s ambassador for the self-employed, I worked closely with my right hon. Friends the Members for Bromsgrove (Sajid Javid) and for Chingford and Woodford Green (Mr Duncan Smith) on trying to harmonise national insurance contributions so that self-employed people would eventually have the same state pension.

However, I want to talk about the lifetime ISA proposal, because it should not be confused with an extra pension top-up, about which every speaker in the debate before me has talked. It should instead be seen as a savings guarantee for the future. It was a tidy move by the Treasury and the Department for Work and Pensions in reaching the point of harmonising NICs. This proposal takes us a little further into the realms of the self-employed being able to look after themselves in future.

I do not want the LISA to be confused with a pension supplement. It is not that. It is something that helps to save for the future. To put it in perspective, we hear a lot of doom and gloom, but let us look where we were seven years ago. The then Prime Minister, the former Member for Kirkcaldy and Cowdenbeath, used to say quite often that he had put an end to boom and bust, but we then went bust in the biggest possible way. Near enough 10 years down the line from that, we have to address how we are going to save for our future. As someone who took the decision 15 or 20 years not to pay into a pension plan, I wholeheartedly welcome what the Government are doing.

I want to provide some perspective. Unemployment is dropping in my constituency—so much so that a Labour councillor was boasting about his business and saying that he cannot get enough employees to fill the positions. The workplace pension has its place, but the LISA has a separate place. I hope that it will carry on and enable people to save for their old age.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I do not want to start by correcting the hon. Gentleman, but I am pleased to have a savings account named after me, and the LISA is most definitely a “Lee-sa” and not a “Lye-sa”. Does he agree that financial education in schools is the crux of the matter? Children must learn how to budget in order to learn how to save and have a secure relationship with their finances.

[David Morris]

That is part and parcel of the mix. However, this Bill is about where we are going in the future. I take on board what the hon. Lady says and I am sure that everyone else in the Chamber and in the country more widely will have done, too.

Thank you for allocating this time to me, Madam Deputy Speaker. I wholeheartedly endorse what the Government are doing.

--- Later in debate ---

[Simon Kirby]

Yes, I would be very happy to do that.

I thank my hon. Friend the Member for Gloucester (Richard Graham) for his thoughtful contribution. Clearly, he feels very strongly about a vast number of issues. I respectfully disagree with some of his opinions, but I hope that he continues to contribute to this important debate, as it is important that we get it right. At the end of the day, this is about helping younger people and poorer people get into the habit of saving.

[Dr Cameron]

Given that the crux of the matter is to help younger people to save, will the Minister have a dialogue with colleagues about financial education at school, and why it is really important that children and young people have a stable and secure relationship with money and that they understand that at an early age?

[Simon Kirby]

I absolutely agree with the hon. Lady. Making sensible, correct and proper financial decisions is important for all of us throughout our lives. She has got her point in Hansard. I will also take it away with me.

Let me come back to the points raised by my hon. Friend the Member for Gloucester. There was some confusion about the factsheet of Her Majesty’s Treasury. May I make it clear that the lifetime ISA is for long-term saving, and is designed to complement pensions? Contributions to an ISA are made from post-tax income.

My hon. Friend the Member for Morecambe and Lunesdale (David Morris) mentioned self-employed people. We should never forget that many people do not have this quandary about whether they should auto-enrol or go for a lifetime ISA. There are sensible self-employed people who either want to save for later life or purchase their first home. I know that the lifetime ISA scheme will be very well received by them.

Finally, I thank the hon. Member for Bootle (Peter Dowd) for his contribution. I disagreed with almost everything he said, but I genuinely look forward to his continued involvement in this important area. Let us not forget that we have a responsibility to the millions of people out there—young people and poorer people—who should be saving and getting the very best assistance they can from the Government.

In conclusion, when it comes down to it, this Bill is about supporting people who are trying to save. It does not matter whether they are a young person looking for a flexible way to save for the future or if they are someone who is on a low income and are making a big effort to save up some money each month, they deserve a savings account that will support them and give them a boost on what they manage to put aside. Although these two savings vehicles are new, they are intended to do exactly that. I am pleased to commend this Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Savings (Government Contributions) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Savings (Government Contributions) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 1 November 2016.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Andrew Griffiths.)

Question agreed to.

Savings (Government Contributions) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Savings (Government Contributions) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) any expenditure incurred by a Minister of the Crown or a government department under or by virtue of the Act; and

(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Griffiths.)

Question agreed to.

Savings (Government Contributions) Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Savings (Government Contributions) Bill, it is expedient to authorise—

(1) charges on certain withdrawals from Lifetime ISAs; and

(2) the recovery (with or without interest) of sums paid by way of government bonuses under the Act.—(Andrew Griffiths.)

Question agreed to.