COMMITTEE FOR SOCIAL DEVELOPMENT

Legislative Consent Memorandum

This Legislative Consent Memorandum has been prepared by the Department for Social Development for the information of Members. It relates to the Savings Accounts and Health in Pregnancy Grant Bill, a Westminster Bill which contains a provision relating to Northern Ireland transferred matters. It also contains a provision to remove the Saving Gateway from the list of excepted matters in Schedule 2 to the Northern Ireland Act 1998. The Bill was introduced into the House of Commons on 15 September 2010 and the approval of the Assembly is required to the principle of Westminster legislating in the area concerned. This approval is required before the Bill goes forward for Royal Assent. A motion:

“That this Assembly agrees that the provisions in the Savings Accounts and Health in Pregnancy Grant Bill (consequential on the proposed repeal of the Saving Gateway Accounts Act 2009) dealing with the supply of information by the Department for Social Development and the classification of Saving Gateway accounts as an excepted matter under Schedule 2 to the Northern Ireland Act 1998 should be considered by the UK Parliament.”

has been tabled for debate in the Assembly and this Memorandum is to provide Members with the background to the provisions and an explanation of why they are considered appropriate.

In the 2008 Budget, the Government announced that the Saving Gateway, a cash saving scheme for working age people on lower incomes, would be introduced nationally.
The scheme was to be a tax-free cash saving account available to people in receipt of qualifying social security benefits or tax credit awards. At the end of the two year maturity period for a Saving Gateway account, the Government would have made a contribution of 50 pence for each pound that had been saved up to a maximum of £300. Accounts were to have been offered by financial institutions approved under the Financial Services and Markets Act 2000 who would have been responsible for processing applications for Saving Gateway accounts and for operating those accounts.
Saving Gateway accounts were due to have been available from July 2010. In the Budget on 22 June 2010, the Government announced that the Saving Gateway was not affordable given the need to reduce the Budget deficit, and would therefore not be introduced.
As the Saving Gateway scheme was cancelled prior to its launch no accounts have been opened, no individuals have been advised that they are eligible for an account and no account providers have been approved to offer Saving Gateway accounts.

The Saving Gateway Accounts Act 2009 extends to Northern Ireland. As the scheme will not be introduced the Bill contains provision to repeal the Saving Gateway Accounts Act 2009.
The Department for Social Development was to have been involved in facilitating the Saving Gateway scheme in relation to the provision of information about those individuals who are in receipt of the relevant qualifying social security benefits in Northern Ireland. As the scheme will not be introduced, there is provision in the Bill to remove the requirement for the Department for Social Development to supply information to Revenue and Customs.
Ahead of the passage of the Saving Gateway Accounts Act 2009 it was agreed that the Saving Gateway would normally be a transferred matter. So that responsibility for the scheme would remain with the United Kingdom Parliament, the Saving Gateway Accounts Act 2009 provided for the scheme to be made an excepted matter by adding it to Schedule 2 to the Northern Ireland Act 1998.
While Saving Gateway accounts have never been added to Schedule 2 to the Northern Ireland Act 1998 as the relevant section in the Saving Gateway Accounts Act 2009 has not come into force, it is intended to remove the Saving Gateway from the list of excepted matters to avoid any doubt.

There are no actual financial effects as a result of this Legislative Consent Motion which is intended to clarify the position in relation to the Social Security Administration ( Northern Ireland) Act 1992 and Schedule 2 to the Northern Ireland Act 1998. The provision in clause 2(3) and (4) of the Savings Accounts and Health in Pregnancy Grant Bill will have a similar effect to consequential amendments in that it will amend these two pieces of legislation to avoid any confusion.
The financial effects of the UK Government’s decision not to proceed with the Saving Gateway scheme will result in savings to the Exchequer from 2012-13 when the first Saving Gateway accounts were expected to mature.
By not proceeding with the Saving Gateway is expected to result in Exchequer savings of £75 million in 2012-13, £110 million in 2013-14, £115 million in 2014-15 and £90 million in 2015-16. The Exchequer saving per year thereafter is estimated at around £60 million. The previous Government had also intended to provide £10 million of funding to Post Office Limited in 2010-11 to meet their set up costs in providing Saving Gateway accounts. In addition it is estimated that there would have been administrative costs of around £15 million between 2010 and 2015. This money will also be saved by not introducing the Saving Gateway.

Following a screening of the proposals, the Department for Social Development considers that an equality impact assessment is not necessary. As the Saving Gateway scheme was cancelled before its launch and no accounts have been opened no group will lose any support since none was in place.

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