Savings Gateway

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Maybe it was the end of a long day but I was pretty churlish about the Government’s pre Queens Speech on Radio 4 last night. In fact there is much in the announcements I like.

For example, while I understand the concerns of small businesses, the overwhelming employer view of the right to flexible working has been positive and I don’t see why this shouldn’t be the case with its extension.

I also hope consensual progress can be made on Lords reform and party funding.

But I particularly welcome the announcement on the savings gateway. This was a policy that was first advocated by the think tank IPPR when I was its Director. It is the sister policy to the Chid Trust Fund, both being aimed at tackling the growing inequality in asset ownership and the high proportion of people who have no saving at all.

By incentivising low income savers the policy encourages thrift and responsibility and so it can be seen as explicitly ‘pro-social’. When we were debating the idea several years ago some economists said it was wrong to encourage poor people to save as the ‘utility maximising’ thing for them to do was to spend all they had. But poorer people themselves tend to disagree.

Even if they only save a few pounds a month it gives people something to fall back on bad times and a nest egg for special occasions and life changes – the kind of thing many of us take for granted.

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  • I think your comments on R4 were largely fair. It's not that any part of the speech was objectionable, just that together they don't throw any light on what the government is for. Its continued use of unintelligible language to explain its actions doesn't help and leads many to assume it's being dishonest.

    Together, this suggests that in the longer term that it will struggle to build an electoral coalition.

  • Your comments on R4 did not come across as churlish, though they did suggest some frustration at the way that the Brown Government is failing to get across what it is for.
    As usual there are good ideas that have a progressive aspect to them, but Brown is caught in a self-made trap that allows the opposition to be the ones shouting up for the poorest families, whether they mean it or not.

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