Economic Policy

Chris Evans Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is right that it is very welcome news from the oil and gas industry, and it is partly because we have been able to provide certainty on decommissioning relief, which it has long sought. One of the challenges for the UK economy is the secular decline in the North sea oil field as it reaches its maturity. Although we will get oil out of it for many more years, we have to look to the post-North sea future, and that is one of the big challenges for the SNP.

[Chris Evans (Islwyn) (Lab/Co-op)]

As a political strategist, does the Chancellor understand that linking the fortunes of the UK economy to discredited credit rating agencies is at best naive and at worst plain stupid?

[Mr Osborne]

That question rather reveals Labour Members’ confusion today. They cannot decide whether this credit rating decision matters or not. What I am saying is that we have to have the credibility to show the world that we can pay our way, and that is precisely what we are doing.

Food Banks (Wales)

Chris Evans Excerpts

Tuesday 12th February 2013 Westminster Hall

[Chris Evans (Islwyn) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship again, Mrs Riordan. I congratulate my hon. Friend the Member for Cardiff West (Kevin Brennan) on securing an important debate.

Sometimes in debates about food banks, or poverty—urban or rural—I get the feeling that Government Members think we make things up or exaggerate them.

[Guto Bebb]

The accusation is not that the Opposition party is making things up, but that it is forgetting history, rewriting it and ignoring its own part in a situation that is desperate for many people in Wales.

[Chris Evans]

The hon. Gentleman has summed up my absolute frustration with the House since I came into this place. All those on the Government Benches seem to want to do is look into the past and blame the Labour Government for everything. I simply ask him to put himself in this position: if tonight someone cannot afford to feed his family, because he finds that he has no food and that his children are screaming for food, will they care whose fault it is? What they care about is where their next meal is coming from. Often in this House, we look more interested in trying to win cheap political points than in bringing about real political change for people who are suffering.

[David T. C. Davies]

Instead of emotion, I am looking forward to something I have not heard so far, which is someone telling us what exactly Labour policy would be. How much extra would a Labour Government borrow? How much extra money would they print? What would they add to the national debt to spend money and resolve the problem?

[Chris Evans]

Were the hon. Gentleman to let me carry on with my speech, rather than intervening in my first couple of minutes, I might have been able to develop that argument. Surely it is a damning indictment of any Government when food banks increase threefold; 22,000 meals were provided by food banks in Gwent in the past year. That is equivalent to a third of the people living in my constituency. Food banks are a damning indictment of Government policies, but they are only a symptom of Government policies.

I had a briefing recently from Caerphilly borough council’s housing department, in which we talked about the effect of the bedroom tax. Single parents whose child is not living with them will not be able to have the child stay over with them. Disabled people will have to leave their homes, even though they have made adjustments, because they have an extra bedroom; otherwise, it will cost them £91 extra, which will have an effect on what they can spend on utilities and food. They are being driven to food banks.

I remember the Welfare Reform Bill going through; everyone was labelled a scrounger just because they were claiming benefits, even though six in 10 people in work are claiming benefits. That is happening an awful lot. We are not talking about the people we might traditionally think of—the ones talked about by my hon. Friend the Member for Newport East (Jessica Morden), such as drug addicts or alcoholics who need food. We are talking about people in work, and that is a damning indictment. Unless there is some change, we are writing off another generation.

I grew up in the ’80s; my father left home when I was 11 and my mother brought me up as a single parent. I could list the things my mother would do with a tin of corned beef to feed us throughout the week; we had corned beef fritters, corned beef stew, and corned beef pie. She even made bread-and-butter pudding out of sandwiches that we had not eaten. Yet she was not faced with the problems that people face now. It is all very well to quote statistics, and it is easy to do that, but what does it mean for children going to school hungry? They are being written off before they even start. They do not have the tools intellectually, because they are too hungry to do school work.

We need to think about radical solutions. Rather than pigeonholing people as benefit scroungers, let us talk about individual need. If I find myself out of work, I have different needs from someone who has not worked for a long time. It is no good the Government saying, “We need to make cuts.” The hon. Member for Monmouth (David T. C. Davies) thinks that we need to make more cuts and that the Government are on the right path— he is nodding away—but if we cut someone’s job, we increase the welfare bill. If we cut the welfare bill through welfare reform, we are putting pressure on charities and others who are helping with handouts. Sooner or later, whether the Government like it or not, someone will have to pick up the bill when the charity has gone under or when the volunteer cannot do the work any more. It will be left to the Government to pick it up.

I would like to have developed the argument further, but someone else wants to speak, so I will give them the last five minutes.

Treasury

Chris Evans Excerpts

Tuesday 18th December 2012 Ministerial Corrections

The following is the answer given by the Exchequer Secretary to the Treasury, the hon. Member for South West Hertfordshire (Mr Gauke), to a question from the hon. Member for Islwyn (Chris Evans) during Treasury Question Time on 26 June 2012.

[Chris Evans (Islwyn) (Lab/Co-op)]

14. What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.

[Official Report, 26 June 2012, Vol. 547, c. 153.]

An error has been identified in the oral answer given to the hon. Member for Islwyn (Chris Evans).

The correct answer should have been:

Income Tax

Chris Evans Excerpts

Wednesday 28th November 2012 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

Let me make it clear that I am not against success. I believe that everyone should be rewarded with the fruit of their labours. However, it is becoming increasingly clear that the Government are in the grip of a failed economic theory—a theory which claims that tax cuts for those at the very top will somehow trickle down through society and that it is possible to go on cutting taxes and spending and that that will have absolutely no consequences.

I am someone who likes to look forward, but I think that in this instance we must look back to the last occasion on which we followed trickle-down economics. When the Thatcher Government followed that policy, they ran deficits in every year except 1988 and 1989. In 1990, we saw record business repossessions, unemployment above 3 million, record mortgage rates and record inflation, and I fear that we are going back there.

Let me tell hon. Members who say that the argument about cutting the top rate of tax is a “left versus right” argument that they are entirely wrong, because it is not a political argument. It is about something quite simple: mathematics. When we take £3 billion out of the economy, we will have to make up that shortfall somewhere, somehow. Judging by what I have heard from the Chancellor so far, I do not think that the Government are very long on detail.

The Chancellor and the Government talk about tax evasion, which has been mentioned today, including by the hon. Member for Dover (Charlie Elphicke), and they talk about going after all those people who avoid taxes. Well, I say this to the Chancellor: “Good luck to you.” Does he honestly believe that the last Government did not go after tax evaders? Does he honestly believe, when faced with people who have created byzantine systems to avoid the taxman, that it will suddenly be possible to close the loopholes? It is simply not going to happen.

People are working harder than they have ever worked before. Some are working 37 hours a week; some are doing two or three jobs just to make ends meet, and what do they see? They see food prices rising all the time. The worst effect is on their families; when they come home from work, they are too tired to involve themselves in their children’s lives. In my constituency, unemployment has risen by 429% in the past year. More people are struggling than ever before, and what do the Government do? They stand back and give tax cuts to the people who are riding in Bentleys and tax increases to those who drive vans for a living.

[John Glen (Salisbury) (Con)]

The hon. Gentleman is making a powerful speech, but if he is so committed to fairness in the tax system, can he tell me why, for 666 weeks under the Labour Government, the higher rate of tax was lower than it is now? How can he possibly stand up and make the case that he is making, given that his party, which was so recently in power, adopted a very different approach?

[Chris Evans]

I congratulate the hon. Gentleman on his factual recall. Yes, the top rate of tax was lower, but—I do not know whether he is aware of this—we experienced something called the financial crash and the rules changed somewhat. That is the truth: things have changed. We live in a different world now, and that should be accepted. My argument, which I shall maintain throughout my speech, is that the people at the bottom are feeling the pain.

The increase in VAT is a tax on the low-paid, because everyone has to pay it; everyone has to buy goods. When I walk down Blackwood high street, I see that every retail business there has been affected by the VAT increase. VAT on food is zero-rated, but the haulier who delivers the food will pass on the increase in VAT on his petrol to the food shop, just as the increased price of cotton is passed on to the clothes shop. Not a single person has been helped. People in this country are suffering, and what do we see? We see a tax cut for those at the very top.

We hear much talk about rebalancing the economy. We are told that the economy is being built, but what this tax cut shows us is an economy that is being built not on people and products, but on perks and promises. That is the wrong message for us to be sending.

[Ben Gummer (Ipswich) (Con)]

I am loth to interrupt the hon. Gentleman, who always speaks with such passion, but I wonder whether he is as angry with the Labour Front Benchers who put their names to the motion and who refuse to promise to restore the 50p tax rate and to cut VAT should they win the election in 2015, as he is with the Government. Surely he should be as cross with his Front Benchers as he is with ours.

[Chris Evans]

I have a lot of admiration for the hon. Gentleman. We served on the Justice Committee together, and I admire the bit of mischief that he is trying to cause me. However, he will be aware that, as I have said before, we do not know what is around the corner. We will make judgments—I am sure that our Front Benchers will make judgments—when we win the next election; and we will win the next election.

I am also struck by the Government’s sheer stupidity. It is all very well to talk about polls and people feeling good about things. When people hear about welfare reform, they support it because it sounds wonderful—66% supported it in the polls—but let us consider housing benefit, for instance. It annoys me that because seven out of eight people who claim it are in work, they are being labelled scroungers. A cap on housing benefit will create ghettoes outside the major cities because people cannot afford to live there and it will make more and more people homeless.

The one thing that the Government need to learn is that someone, somewhere, will have to pick up the bill, whether it is the taxpayer or the hard-pressed charity. We do not live in a consequence-free society. It is not possible to go on cutting taxes and cutting spending without something going wrong. I am deeply concerned, because people out there are crying out for change and the Government are in the way. It is time that we started building a society and an economy in which hard work is rewarded and people can flourish once again.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 11th September 2012 Commons Chamber

[Mr Osborne]

We have toughened up the regulation of consumer credit, and next year there will be a tough new consumer agency, the financial conduct authority, which we are creating in order to deal with the bad advice that is sometimes provided to families. Indeed, Martin Wheatley, its chief executive, gave an interesting speech about that last week, and about the impact of sales commissions and the like on the provision of bad advice and bad products to families. We are taking action to do that, but as I said, the worst possible thing for all those families, and everyone else in the country, would be a sharp rise in interest rates, which a loss of confidence in the Government’s fiscal policies would bring about.

[Chris Evans (Islwyn) (Lab/Co-op)]

10. What estimate he has made of the effect of the level of VAT on the retail sector in the last 12 months.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government aim to provide a climate of economic stability that will benefit all businesses. That would not be possible without a credible plan to deal with Government debt, and a VAT increase is an important component of that plan.

[Chris Evans]

Since January this year, 42 retail businesses in Wales have gone to the wall. What message does the Minister have for Welsh business leaders who have called for a reduction in VAT to breath new life into the high street?

[Mr Gauke]

Retail sales growth has generally been positive over the past year. Let me underline this point: if the biggest problem faced by the economy at the moment is that we are not borrowing enough, that is, I am afraid, a very strange diagnosis.

Banking Competition

Chris Evans Excerpts

Thursday 12th July 2012 Westminster Hall

[Chris Evans (Islwyn) (Lab/Co-op)]

Thank you, Mr Chope, for calling me to speak. In debates such as this, I always think of the time I spent working in a bank, in the retail sector.

Last week I sat behind Bob Diamond at the Treasury Committee, and watched as he was grilled by parliamentary colleagues. It got me thinking: this man is walking away with a £2 million bonus for doing something that is categorically wrong. It made me realise why people are so angry. The worst thing, which people do not seem to understand, is that Bob Diamond will not get the dogs’ abuse that someone working behind the counter in Newbridge or in Risca will get. They will be told that they are criminals, thieves and crooks. It is the people working on the front line who will get the abuse.

What really annoys me is the current sales culture in banks. I understand that banks are private businesses and need to make money—nobody needs to intervene on me to tell me that—but they seem to be pushing their staff to the limits. For example, when I worked in a bank, I was told to stay until 7 o’clock at night to phone people who were arriving home from work to arrange sales appointments for the following day. My contract of employment ended at 5 o’clock, yet I was expected to stay until 7 o’clock, because, I was told, my bonus would be my payment for doing so.

Another frustrating thing—this annoys me when people bash bankers about their bonuses—is that, while most people who work in a bank get a bonus and often make up their money with it, they have to look on and see those in charge who have done wrong and who have affected people’s trust in bankers walk away with big bonuses. The term “bonuses” is absolutely meaningless.

People who work in banks also have a raw deal on training. When recruits turn up at a bank, they are not told anything. Many of my colleagues when I worked at a bank did not know what a clearing house automated payments system or a bankers’ automated clearing services payment was, and did not understand mortgages, yet they were being told to sell to people. The fundamental question we have to ask ourselves on the future of banking in this country is not what do we want, but what do consumers and those working in banks want? First, when people go to a bank, they do not want to be flogged products that they do not want. When I move my money between accounts every month, I do not want to be asked, “Mr Evans, have you paid off your credit card? Do you want a loan? Do you want to buy a new car?”, when all I want to do is transfer my money.

We need to get away from a culture of high-pressure sales and of computers making decisions, and get back to a culture of bankers actually offering advice. When I first joined the bank, I naively thought that it was a profession similar to that of a lawyer, but then I was told—this was 20 years ago—that people did not bother with banking exams because they were meaningless. I find that strange. When I ask the Financial Services Authority, Lloyds TSB or HSBC what they are doing to train staff so that people know that their bank manager is giving them the best possible advice, they reply, “We have in-house training,” but is such training given across the board and is it an industry standard? On education—I hope the Minister will focus on this, because nobody ever talks about it—can we find a way of returning banking to its previous status as a profession with recognised exams at an industry standard, so that everybody knows that their bank manager is giving them the best possible advice? That would be good for the banks and for the consumer.

In March, I tabled a private Member’s Bill called the Banking (Disclosure, Responsibility and Education) Bill. It was based on the Dodd-Frank Act in America, which enables each and every bank transaction to be monitored. Perhaps we would have discovered the LIBOR scandal earlier if we had been tracking everything and had an office of financial research.

The constituency represented by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) is not like mine—mine is a valleys seat—but we have similar problems with huge amounts of debt and illegal lenders. We have organisations such as Provident Personal Credit and Shopacheck. Cash Converter has popped up on the high street and its representatives even want to meet me to discuss their social responsibilities. Many people are unbanked and it would be a good idea, as my hon. Friend the Member for Harrow West (Mr Thomas) suggested—he is not in his place—to track people by their postcode and for the banks to release a report every year stating to whom and to which demographics they are lending money, and how they are contributing to society. That way, we could introduce a rating system so that, if people wanted to change banks, they would know whether they were moving to a bank rated A, AA, B or C. Also, there would be competition between banks and they would have to “up” their game, which is something I want to see.

I support switching and agree with the hon. Member for South Northamptonshire (Andrea Leadsom) that we need to have more portability between bank accounts, but from what I can see—I will probably be attacked for this—the services offered by banks are much of a muchness. The interest rate on loans provided by different banks is usually the same—it is very low—and the differences between individual savings accounts are small, as are the interest rates on credit cards, so people do not actually move to anything better. I want to remove the barriers to entry, which many hon. Members have mentioned, and we could achieve that by considering the role of credit unions.

I represent the Co-operative party as well as Labour, and it says that the way forward is to have community banks and to introduce regulations for more credit unions. In Wales, everybody has access to a credit union, which is fantastic. A credit union is owned by members and all its profits are pumped back into lending to people. I want to see its role expanded, so that it lends not only to people but to businesses—micro-businesses and small businesses—that cannot get money elsewhere. We need to consider that.

I want to address what was a personal bugbear of mine when I worked at a bank. I have raised this issue on numerous occasions with various Ministers from the Ministry of Justice and the Department for Work and Pensions—I am now raising it with a Treasury Minister—and I hope it will be addressed. Whenever I go into banks, members of staff tell me that they have a number of very good customers who pay their bills on time and whom they want to lend to and develop a relationship with. However, when they credit score some of those customers’ accounts, it reveals bad credit information, because they have received a county court judgment. When the bank’s staff speak to them, they discover—this happened when I worked at a bank as well—that they have a bad credit rating not because they defaulted on their mortgage or on a financial product, but because they got into a dispute with a gym or a mobile phone company, which, rather than trying to resolve the issue, went straight to a county court to get a judgment against them that completely messed up their credit record.

[Philip Davies in the Chair]

I recently read Duncan Bannatyne’s book, “Anyone Can Do It”, in which he says that if someone does not pay their final payment, even if they have cancelled their contract, he would have no hesitation in taking them to court. I hope the Minister will address that issue, because it is a real one for many customers and for banks whose good customers are being cut off. If someone is in a dispute with a mobile phone company or a gym, such organisations should not be allowed to impose a CCJ and wreck their credit rating, especially if they can show that they have been in a dispute.

On the unbanked, I still have serious concerns about the basic bank account. It has been a very good innovation that has brought more people into the banking sector, but, even though it allows people to have an electron card and a bank account, it does not credit score for any products. Therefore, if someone is put through a credit-scoring process for a classic account or a traditional bank account, the credit score agency cannot be told that they have been a basic bank account holder for five years and that things have gone really well; it can only go on the information that it has. How can we manage people from the basic bank account on to mainstream banking, which is a huge issue, especially in areas such as mine? That would break down the fear that some people have of talking to their bank manager. They think that it is easier to borrow money from the woman from Provident, or Shopacheck, who visits on a Monday night. We need to tackle those issues.

Finally, I want to see the development of a mutual sector in banking. Conventional banks used £60 billion when they were bailed out, but the mutual sector did not use any money. Bradford and Bingley was a building society for 150 years, but it lasted only 10 years as a bank. We have to do more to encourage mutuality in the banking sector, and the starting point for that is a discussion about community banks and credit unions. I hope the Minister will address some of those issues.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 26th June 2012 Commons Chamber

[Miss Smith]

I can confirm that, through the actions of this Government, pump prices are 10p a litre lower than they would have been under the previous Government, who had scheduled in 12 fuel duty rises while they were in office and six more for afterwards.

[Chris Evans (Islwyn) (Lab/Co-op)]

14. What the average waiting time for calls to Her Majesty’s Revenue and Customs helplines was in (a) the last 12 months and (b) the previous 12 months.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The average waiting time for a customer calling HMRC’s helplines in the past 12 months was four minutes and 19 seconds. In the preceding 12 months, it was four minutes and 13 seconds.

[Chris Evans]

A constituent of mine has had a nightmare experience trying to get through to HMRC: he phoned several times throughout the week, but never spoke to an adviser and kept getting an engaged line. His is just one of many cases involving HMRC in my constituency office at the moment. With 10,000 HMRC staff being laid off, how do the Government hope to clamp down on tax avoidance when they obviously cannot collect taxes in the first place?

[Mr Gauke]

The first point to make is that the numbers of front-line staff dealing with tax avoidance and tax evasion are increasing over the course of this Parliament, in contrast with what happened during the last Parliament. There has been improvement in contact centre performance in the number of calls that get through, but more progress is needed. HMRC is deploying staff more flexibly and conducting small-scale pilots to see whether the private sector can provide additional capacity. HMRC is determined to improve performance.

Business and the Economy

Chris Evans Excerpts

Monday 14th May 2012 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

If there were a parliamentary award for the most bizarre speech of the day, I am sure that the hon. Member for City of Chester (Stephen Mosley) would earn it. We have heard that the happy days are around the corner. We have double-dip recession, but it is okay, because it was all Labour’s fault, even though the economy was growing when Labour left power. Apparently, 1 million young people unemployed is good news. Wonderful! That is not the only thing we have heard; we have also been told that stripping people of their employment rights is the way forward. Is it not funny that when they have blamed everything else, they start blaming employment rights for our problems?

I say that the major aim of a Government of any colour should be to make this country the best place to start and grow a business. Yes, I agree that a cut in corporation tax is a good way forward. I believe that cutting red tape is a good idea, too, and I look forward to seeing more concrete proposals over this Parliament. When red tape is tackled, I hope that the Government will start to talk about tax reform. When I speak to anybody who is hoping to set up their own business, they tell me that the main barrier they face is the fear of the complex tax system that they will have to tackle. It seems strange, but the more complicated the tax system, the more there is only one winner. It is not the small business man; it is the accountant. It seems odd that small businesses have to spend time form filling when they could be chasing orders. We need to realise that, however good the Government believe they are, it is ultimately people who make businesses successful.

Talking of people, and young people in particular, we are now operating in a globalised economy. Young people in Wales will not be competing with young people from the north-east, the south-west, Scotland or Ireland; they will be competing with the Chinese, Indians and Brazilians. That is why our competitive edge is all about creating a highly skilled and highly motivated work force.

I have two friends—[Interruption.] Yes, I have only two friends; I would only have to borrow 20p and I could phone them both. The two friends in question work in the training industry. One works in further education; the other works for a training company. Both come from the old school, where it was said that an apprenticeship lasted four years. What they tell me worries me. My friend in FE says that some FE colleges are subcontracting training contracts to training companies, offering so-called apprenticeships that are supposed to last for three years, but saying that people can become a qualified electrician in a year. Courses that should take three years are being done in three months. All the while, people are driving around in their high-performance Mercedes and Aston Martins—no doubt bought out of the money that they should be investing in young people. This scandal is already going on, as we saw in a BBC “Panorama” programme. It should be seriously investigated, because this seems to me to be a misuse of the word “apprenticeship”.

The word “apprentice” conjures up images of the ’60s and ’70s and of young people between the age of 16 and 21 doing full-time apprenticeships and coming out as draftsmen, toolmakers or even, for the lucky few who aspired to it, with a footballing career. The problem is that people are being called apprentices nowadays when they are nothing of the sort. Why is it that of all the apprentices in this country, one in 10 is based in the supermarket Morrisons? Are they apprentices when they are working in retail? What skills are they getting? What trade are they developing?

[Julian Smith]

I am shocked that the hon. Gentleman does not feel that the sort of training people get in a supermarket like Morrisons would provide a very good basis for a whole range of jobs.

[Chris Evans]

What I would say is that that is not an apprenticeship in the traditional sense. I believe that the word “apprentice” is being misused. All that is happening is that apprenticeships are taking the place of the youth training schemes that failed in the 1980s.

This is the main point that I want to make. We must formalise the process that apprentices undergo. In the 1960s a UK training industry board formalised the apprentice system, producing training manuals and setting the standard for what apprenticeships should be. Now the definition is so muddled that we do not know what apprenticeships actually are, and that is why we must take serious action now. Recently I went to Pensord, in my constituency, where Pensord Press has launched a major apprenticeship scheme. I fear that good schemes like that will be mixed up in the scandal of our not knowing what “apprenticeships” means.

When I speak to people who take on apprentices, they tell me that they meet young people who do not have the necessary skills. They do not turn up on time, they play with their mobile phones during interviews, or they do not know how to speak to people; sometimes they swear in ordinary conversation. That worries me. I could talk for a long time about it. We need to hold a serious debate in this country about how business and education can work together.

I visited Cwmcarn high school when I worked for my predecessor, and it was launching what was described as a basic skills passport. All the children in the school would be assessed for literacy, numeracy, performance and public speaking, so that when they were interviewed by employers, they would be able to say “These are my skills: this is what I have achieved during my time at school.” It is a good scheme, and it should be rolled out throughout the country.

Last Friday I went for a chat with people at the University of Wales, Newport, who talked of universities’ becoming hothouses for businesses. I have always said that we have massive academic resources in research, and that we should open up the universities for that purpose. Those people talked to me about the concept of an entrepreneurial university, drawing a parallel with teaching hospitals where the practitioners are lecturers and students must undergo internships as part of their qualifications. That could be applied to skills in areas such as computing, engineering and business. I do not know whether anyone has watched the documentary about Ayrton Senna, but that was made by a student at the university, or the BBC programme “Rhod Gilbert’s Work Experience”, produced by a company called Zipline Creative— another company formed by some of its graduates. We need to have that debate about business and education.

I prepared a longer speech, but I have only 30 seconds left, so let me say just one more thing. We must be very careful when we talk about employment rights. I was a trade union official, and I do not think that we should clamp down on people who go to tribunals with trade union representatives. It is hard enough already for someone, even with a strong case, to undergo the grievance procedure. If we take the vital right to union representation away from people we will cause trouble, and we will do nothing for competitiveness in this country.

Financial Services Bill

Chris Evans Excerpts

Monday 6th February 2012 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

This Bill will amend a series of pieces of legislation. When we talk about reforming financial services, we have to think about innovation and how fast society and markets move on. When I think about the reform of financial services, I always think we should tread with caution. This Bill is very important in that it has to reform a system that has clearly failed. I worked in the financial services industry myself, many years ago, and when I want to judge a Bill such as this one, I think of three tests on financial education, financial inclusion and disclosure.

On the first test, it is highly important that we bring about not only statutory financial education in schools but a duty on banks to provide some sort of financial education. I use an example from my own life. Many years ago, when I first had my student grant, in the days when we had student grants, long before student loans, I remember jumping off the train with a cheque for £500 in my hands, almost shaking with nerves about what to do with it. I went straight into the first bank I saw, the name of which I shall not mention—I do not want to embarrass it, as I have not been a great customer. The bank opened a student account for me, gave me a £50 voucher to spend in Burton, with which I bought a pair of jeans, and gave me a magic bank card, which meant I could go anywhere I wanted and buy anything. I could go to the bar or a clothes shop and have all these wonderful goods. By about December of that year, I had a letter through the post saying, “Mr Evans, we’d like to talk to you about your unauthorised overdraft charges”.

When I worked, the same things seemed to be going on. There were people even in their 40s and 50s who did not understand that when they wrote a cheque it would come out of their bank account. They would ask me, “Mr Evans, how am I spending this money when I’m using my card?” I think that banks ought to have some fiduciary care for their customers and ensure that people understand what they are taking out. Things should be simple and understandable.

I want to make a second point about financial education. When people talk about financial education they mention consumers and people at the bottom end of the scale who get services from the bank, but when I was working in banks I often found that people who called themselves bankers did not understand the banking system. They did not understand what a clearing house was, what a CHAPS, or clearing house automated payment system, payment was or what a BACS, or a banker’s automated clearing services, payment was. I was very nervous about the fact that those people were serving people and selling them products but did not seem to understand how the banking system worked. When I spoke to management about that, they said, “Years ago, we had banking exams and this was a profession, but they have fallen by the wayside now as we have moved towards a sales model.” I have some sympathy with the banks, because they are not benevolent institutions—they have to make profits and sell their products—but consumers need to have confidence that the person selling to them understands what they are talking about.

That leads me to another point about consumer protection. Consumers need to understand the products they are being sold. I can think of many occasions on which people were sold products that they did not understand. For example, banks’ financial advisers said to people about bonds, “Oh, it’s okay—a bond is just a savings account, but you do not have a bank card to draw out on it and you have to keep it there for five years.” When people found out that bonds were being invested in risky ventures such as the dotcom boom, which eventually went pop, the banks had a number of complaints about that. It is very important that people understand what they are being sold and that everything is clear.

I also think there should be some framework for the sellers. I remember when the financial planning certificate came about. The very first paper asked, “If somebody came into the bank and wanted to protect their family if they died, what would you sell them—A: life insurance, B: general insurance, or C: send them home?” That is quite simple and there is no knowledge in knowing that they must be sold life insurance. It is important that we have some sort of framework.

The most important part of the Bill, which does not go far enough, concerns disclosure. In America there is the Dodd-Frank Act, which says that every financial transaction made in the US has to be documented through an office of financial research. I would like to see that added to the Bill at some point. It comes to this: the financial crisis happened as a result of myriad problems—we cannot pinpoint one—but one weakness in the system was that we did not know about financial transactions.

I will give two examples. First, Barclays wanted to buy Lehman Brothers. The board said yes, but the regulator, which had so much on its plate, said no. Then Lehman Brothers went bust and was no more. Four years later, the bank and the regulator still do not have access to that information. Secondly, RBS, which has been mentioned a lot today, said to the regulator and to its board in March 2007, “We do not have any toxic debt or bad-book mortgages.” Yet it was later found to have £1.7 billion of bad-book lending. It, too, went bust. It is therefore important that we have some sort of financial audit, which would have an advantage for the consumer, as we would know how many bad basic bank accounts we have and who the banks are lending to. It would also help with community lending.

I will digress a little, if you will allow me, Mr Deputy Speaker. I have a personal bugbear with the basic bank account. It was brought about for financial inclusion, and it is important that everyone has access to financial products, but my experience of the basic bank account when I worked in the bank was that often the people with that account were on benefits or moving jobs. When it came to lending, they found that they did not credit score and often sellers were not interested, because those people did not credit score for credit cards, bank loans or any other financial products. They were then simply left to their own devices and often fell into the hands of payday lenders and legal loan sharks, as my hon. Friend the Member for Walthamstow (Stella Creasy) has mentioned.

I believe that through the FCA we have a chance to bring about financial inclusion audits and to map where each financial transaction takes place. It would be very dangerous to say that a financial crisis will never happen again, but I hope that we can put things in place to ensure that, if it does happen again, it might not be as bad as it was this time. The US has the tool, so why can we not have it?

The Economy

Chris Evans Excerpts

Tuesday 6th December 2011 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

We have heard the name of John Maynard Keynes again in this debate. My favourite Keynes quotation is the one in which he says that there comes a time when every Government have to indulge in “ruthless truth-telling”, and it is time that this House stopped acting like Nero when Rome was burning.

We stand on the edge of the abyss, and we have a eurozone crisis that is not being solved. Nothing seems to be happening. Greece is on the point of defaulting, it could exit the euro and it could be quickly followed by Spain, Portugal and, even, Italy. Yes, we might say, “We’re not in the euro: we’re little Britain; they can’t touch us,” but the key thing is that their bonds are held by British banks, and British banks will have to bail them out once again.

We have to ask ourselves, “Are we going to stand back and allow ourselves to sleepwalk into another financial crisis, or are we going to heed the warnings and do something about it?” Last week, when we had the autumn statement, the headlines were that the OBR had downgraded its forecasts, but what worried me more than anything, and what was not said anywhere or by anybody in the House, was that the OBR could not quantify what a crisis in the eurozone would do to the British economy. The best economists in the Bank of England could not even quantify or say what disaster might befall us if there were a euro crisis, and to me that is very concerning.

There comes a time with every Government when they have to put ideology aside. When Labour nationalised the banks, it did not do so because of ideology; nationalisation was 30 years ago and belonged to the past. It did so because nationalisation was a necessity and a practicality, so now, as we face the crisis in the eurozone, we have to put ideology aside, see what the practicalities are and put them into practice. It calls for the type of bravery that is rarely seen in this House, but, if we had to nationalise the Bank of England and bail out the high street banks again, we would be saying to our constituents, “If you have the dream and the hope of setting up a business, it ain’t gonna happen, because the banks are going to be even more cautious about lending to you,” and, “If you have a mortgage, you’re not going to be able to move it on to a lower interest rate, because the banks are not going to take that risk again.”

The problem is that, with every crisis, every politician will stand up and say, “Oh, it’s never gonna happen again. It won’t happen on my watch.” Even the Chancellor has said, “It won’t happen again. No, not while I’m Chancellor—no it can’t,” but the truth is that it can, because we have not learned the lessons of the previous financial crisis.

In my speech, I wanted to analyse the legislation that affects banking, so I looked, researched and went to the Library, but I could not find any. There was none at all, so we are facing another crisis with the same banking practices and with a Government unwilling to do anything.

One thing on which I agree with Keynes is that, “During a recession you do not raise taxes.” But what have the Government gone and done? They have put VAT up. It is all very well saying, “We’re going to create jobs,” but, if someone needs to drive to work and they are paying £1.33 for petrol and £1.41 for diesel, they might find it difficult to do so. If they are shopping and find that the price of their shopping basket has increased by 5% in the past year, they might not be able to afford food. Those are the decisions that people face.

I wish I had more time, but I will say this: the Government have an opportunity to do something. We need to look at skills and education, and to have a grown-up, adult conversation, asking, “Why are our young people leaving school not equipped to go into work?” I talk to people in my constituency with apprenticeship schemes, and they say that the kids are not prepared, so let us have an adult conversation and ask, “Why are they not prepared? What is wrong with the education system?”

The final point that we need to look at is tax reform. It is all very well the Government giving people a 1p cut in corporation tax, but when I speak to the small business man I find the thing that concerns him more is red tape. He asks me, “When I have a micro-business, why do I have to employ an accountant? Why can’t I have a simplistic tax form to fill in?” I wish I had more time to develop those arguments, Madam Deputy Speaker, but I will sit down now.

[Madam Deputy Speaker (Dawn Primarolo)]

Good!