THE Treasury has rejected proposals by the City’s ethics body to help increase the number of 16-year-olds opening bank accounts across the UK.
The Chartered Institute for Securities & Investment (CISI) had suggested that youngsters should be allowed to use the letters sent to them by HM Revenue & Customs containing their National Insurance (NI) number as a form of identification for opening a bank account.
Under the plan, senior staff at the pupils’ schools would have verified the children’s letters for the banks.
Simon Culhane, the CISI’s chief executive, received support for his plan from English schools minister Elizabeth Truss and the British Bankers’ Association.
Culhane then held talks with David Gauke, exchequer secretary to the Treasury, urging him to support the proposed scheme.
But the CISI – which also sets examinations for people wanting to work in financial services – has now been informed that Gauke has refused to back the project, which could also have operated in Scotland.
Culhane has branded the decision not to press ahead with the CISI blueprint as “disappointing” and illogical.
In a recent exchange of correspondence between the two men seen by Scotland on Sunday, Gauke said: “I am sorry you are disappointed in my response but I remain unable to support your proposal”.
Gauke was concerned that adding a message about bank accounts in the NI letters would have complicated matters. He said his main focus has to be on maintaining efficient administration of the tax and NI systems.
“You will appreciate that this is dependent on taxpayers knowing and using their NI number and giving it to their employer when they start work,” Gauke writes.
“Research shows that ‘one message, one time’ is the best way to attract the customer’s attention and prompt them to action. And – although it might appear to make financial sense to load other messages into one product – this dilutes the overall effectiveness of that product.”
But Culhane has told Gauke he is “disappointed with the outcome”. In a letter he said he fears “officials may have given poor advice” in saying the primary reason for deciding not to proceed was that the Department of Education was unable to make all schools and colleges in England administer the plan.