Class 4 National Insurance Contributions

Chris Evans Excerpts

Wednesday 15th March 2017 Commons Chamber

[Mr Hammond]

I empathise enormously with the self-employed of my hon. Friend’s constituency. He will know that I once lived among them. I sympathise with the point he has raised about public sector employees using personal service companies, but he will know that we have legislated so that, from next April, public sector engagers of people who use personal service companies will be responsible for deducting the tax and national insurance contributions that those people would be paying if they were employed directly as employees.

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

Will the Chancellor give small businesspeople an assurance that the three years he talks about is not simply a stay of execution and that we will not see another Tory tax hike in three years’ time?

[Mr Hammond]

I have made it clear that there will be no increase in national insurance contributions during the remainder of this Parliament. As I have said, I am not setting out today the Conservative manifesto for the next general election. I am making a commitment for this Parliament, and I hope the House will be satisfied with that.

Unauthorised Overdrafts

Chris Evans Excerpts

Wednesday 8th February 2017 Westminster Hall

[Rachel Reeves]

My hon. Friend is absolutely right. We have a situation where people can be charged £5 or more per day by many high street banks for going just a few pence overdrawn. Those charges rack up very quickly. The issue is that they are totally disproportionate to the offence. Going just a few pence over an overdraft limit in one month could mean £100 of charges, and as she says, the charge for doing so over two calendar months is potentially £180.

It is simply not acceptable that banks are making large profits at the expense of pushing the most financially vulnerable people deeper into debt spirals. My hon. Friend the Member for Ashfield (Gloria de Piero) gave one example, and StepChange has told me about two other cases. The first is of a 42-year-old man who racked up overdraft charges after losing his job. Interest on his overdraft and persistent charges for going over his limit meant that on average, £80 a month was added to his debt. Over a year, his overdraft debt increased by more than £1,000 because of interest and unauthorised overdraft charges. The second case is of a 38-year-old woman who faced spiralling overdraft debt after getting divorced. The increased burden of managing financial commitments on her own meant that she slipped into an unplanned overdraft by £90. That led to a cycle in which she was constantly in and out of an unarranged overdraft, and her overdraft debt increased to £1,000 due to interest and charges.

Those people, like so many others, were already in difficulty and trying to manage their debt from day to day. The banks should have a responsibility to help them manage their finances and help them out of their cycle of debt rather than sending them deeper into crisis with extortionate charges. The banks know that those customers are financially vulnerable and struggling, yet they do nothing to help—in fact, they do the exact opposite by making it harder for them to get a grip of their finances.

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

I thank my hon. Friend for securing this timely debate. Does she agree that it is sometimes in the banks’ interest to allow customers to run massive overdrafts so that they can push them on to even higher personal loans and other products, which they might not need and might not be right for them in the circumstances?

[Rachel Reeves]

I agree. What really worries me is that most of the £1 billion that is made every year from unauthorised charges is made on the backs of those who are most financially vulnerable. It is a bitter irony that it is now a better deal for some people who need short-term credit to go to a payday lender rather than their high street bank. Most of us regard banks as more reputable and fairer to customers, yet for many people that is just not the case.

Huge progress has been made on the charges faced by people who access finance through payday lenders, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) mentioned, with the introduction of a cap following great work by my hon. Friend the Member for Walthamstow (Stella Creasy), so why are banks still allowed to get away with these unfair practices? There was some hope last year that this problem would be addressed when the Competition and Markets Authority undertook a review of the retail banking market. The CMA recognised the issue and the inquiry’s chair subsequently told the Treasury Committee that unauthorised overdrafts are

“the biggest single problem in the personal banking market”.

The CMA published its review of retail banking on 9 August, but frankly its conclusions and proposals were a missed opportunity. It found that overdraft users make up almost half of those with personal current accounts and that many find it hard to keep on top of their arranged or unarranged overdrafts. It acknowledged that failing to do so can be costly, since overdraft users can accumulate high costs from the complicated mix of interest, fees and charges.

The review goes on to say that overdraft users, like other personal current account customers, have very low switching rates, which is particularly striking given that they often have the most to gain from switching. One reason for that is that overdraft users can be uncertain about whether they will be able to obtain an overdraft facility from a different bank or when such a facility would be made available to them and are therefore worried about moving accounts,. Anyway, none of the major high street banks has a great offer for customers who are financially vulnerable.

When it came to remedies, the CMA’s proposals, quite frankly, fell well short of the mark. Some measures will go some way to addressing problems for some people, but not for those who most need support. One proposal says that customers need to be given clear notice when they are going overdrawn and that banks will be required to notify customers when they are going into an unarranged overdraft. Customers also need to be given the opportunity to avoid incurring charges, and the alerts that banks will be required to provide will inform them of a grace period during which they have an opportunity to avoid charges by paying more money into their account.

Critically, the CMA fell short of proposing an independently set maximum cap on the charges on overdrafts, as we have with payday loans. Instead, the report said that banks will be required to set their own ceilings on their unarranged overdraft charges in the form of a monthly maximum charge. However, most banks already have that. The problem is not that banks do not have a maximum charge—they do, and it might be £5 a day or £90 a month—but that the maximum charge is much too high.

The major four high street banks, which make up 77% of the current account market, already set their own caps on charges, and those charges can be up to £100 a month. The CMA’s proposals represent little more than business as usual for those banks. Competition in this section of the market is weak, and in the past few years it has got weaker still with the merger of many of our high street banks. Heavy unarranged overdraft users are the least likely to switch banks accounts. Banks make more than £1 billion from unarranged overdraft charges and, given the substantial revenues they generate, there is little financial incentive to lower existing charges.

Ultimately, the proposals in the CMA report might take small steps towards helping some, but for the majority of people who are already struggling and do not have the means to prevent unauthorised overdrafts even if they are alerted to them, they will do little, if anything, to help. The monthly maximum cap as proposed by the CMA will likely do nothing to stop the deepening of a person’s debt crisis, with punitive and disproportionate charges.

I do not want to deny the banks the right to charge for the services they provide, but I do want some fairness and proportionality. It is not fair to charge £5 a day or £90 a month for being a few pence over an overdraft limit, and it is not fair to whack charges on customers who are struggling with debt, in the knowledge that the charges will make their problems worse, not better. Banks need to take some responsibility for their customers.

As the Competition and Markets Authority admitted at a meeting of the Treasury Committee, the measures proposed in the report are geared at everybody and not in particular those who are financially vulnerable, for whom no direct action is proposed. When I asked whether the banks were taking advantage of financially vulnerable customers, it conceded that those customers who are least likely to switch are a “captive audience” for the banks and their excessive charges.

Ultimately, the Competition and Markets Authority report was a huge opportunity finally to put an end to what it calls “uncomfortably high” charges and to address what it said was the

“biggest single problem in the personal banking market”.

However, the opportunity was squandered. In effect, it passed the buck by asking the Financial Conduct Authority to respond to the recommendations. Peter Vicary-Smith, the chief executive of Which?, said to the Treasury Committee that the Competition and Markets Authority had left the heavy lifting and the difficult decisions for the Financial Conduct Authority to make. In response to that buck-passing, the new chief executive of the Financial Conduct Authority, Andrew Bailey, has made the welcome decision to include this issue in its ongoing review of high-cost short-term credit, which will report later this year.

The Financial Conduct Authority needs to do more to tackle the detriment caused by persistent overdraft use. I have been pleased by the focus that the FCA has placed on this issue so far, picking up where unfortunately the CMA left off. StepChange Debt Charity says that the review

“should include looking at what more can be done by lenders to support people who are trapped in an overdraft cycle and give them better and more affordable ways of paying back their debts.”

HMRC Estate

Chris Evans Excerpts

Tuesday 10th January 2017 Commons Chamber

[Jane Ellison]

I am not entirely sure I recognise the point being made. Most of our taxpayers, whether businesses or individuals, now interact with HMRC on the phone or digitally. The number of people who make personal visits, and expect to be able to make a personal visit to a local office, is dramatically lower than a generation or two ago. It is right that we pursue this modernisation programme, but it is also right, as the NAO has reminded us in this timely report, that we review the programme at every stage to make sure we are getting everything right and we learn from each iteration.

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

I am sorry, but I have to disagree with the Minister on customer service, having seen my wife wait for half an hour for someone at HMRC to answer the phone over Christmas and given that a previous NAO report has shown that three in 10 people give up before being answered, as the average waiting time is 47 minutes before somebody picks up the phone. As the Minister will know, this was only resolved when HMRC recruited an additional 2,500 members of staff to deal with this crisis at the end of 2015. Is she confident, even though an NAO reports says that for every pound saved by this change £4 will go on telephone bills, that it will not cause a decline in customer service?

[Jane Ellison]

The focus on customer service is vital. At the heart of the wider transformation programme, not just the estate transformation programme, is the desire both to make sure HMRC is the most effective tax collector that it can be and to deal with customer service. So that is central to all the questions I ask of HMRC and it asks of itself.

On the specific point, I am sorry to hear the hon. Gentleman’s wife waited for that long. I am concerned about the number of people who wait so long. Although they are a small proportion of the customers who ring HMRC, because of the large numbers who do so, it is still quite a lot of people, and it is an issue I have specifically been discussing with senior HMRC customer service managers, with a view to addressing it further.

Leaving the EU: Financial Services

Chris Evans Excerpts

Thursday 3rd November 2016 Commons Chamber

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

I begin by congratulating my hon. Friends the Members for Nottingham East (Chris Leslie) and for Leicester West (Liz Kendall) on bringing forth this timely debate. They are both known as having been huge talents, and their absence from the Front Bench is unfortunate.

I come to this debate with a sense of frustration. Like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I worked in financial services for a number of years before I came to this place. I get frustrated when I hear politicians characterising bankers as greedy, yacht-going men who live in high-rise apartments, looking for ways to rip off the British public to make themselves even richer. That is not my experience of the banking system, and it is not the experience of the people I meet in my constituency, such as those who work on the high street in Blackwood or people such as Jonathan Brenchley from Barclays, a community relations manager who works hard to improve community relations. I recently had a meeting with NatWest, which is trying to improve IT and promote small IT businesses so that they can grow in Wales.

It is true that financial services are the largest exporters in the world. Some 11.8% of our GDP is in the financial and related sectors. The financial industry employs over 2 million people, and not all of them are based in the City of London. It employs one in 14 people in the UK on average, and two thirds of them are based outside Greater London. In Wales, for example, 54,300 people are employed by the financial and professional services industry. These are people who really believe in their companies; they have a buy-in, and they want to provide the best possible customer service. That is why I am concerned.

Before the referendum of April 2016, PricewaterhouseCoopers conducted an analysis of what effect leaving the European Union would have on the financial services sector. The outcome was grim, forecasting that leaving would result in the loss of 70,000 to 100,000 jobs by 2020, with a slight recovery over time, but remaining with a loss of 10,000 to 30,000 jobs by 2030.

As we have heard, work in the financial services industry involves helping businesses to grow and individual people to reach their potential. Suffice it to say, it is the base industry for everything in this country. The prospect of the UK leaving the EU is a real threat to the financial services industry. Our financial services industry does not operate in a vacuum; rather, it relies on international trade and the flow of capital around the world and particularly the EU.

At the moment, the sector makes extensive use of passporting, as we heard from my hon. Friend the Member for Leicester West. The Treasury Committee’s publication of figures from the Financial Conduct Authority shows that 5,476 companies registered here in the UK depend on these passport rights to do business with the EU.

[Sir William Cash]

In the light of the hon. Gentleman’s condemnation of the vote to leave, will he remind us how his constituents voted in the referendum?

[Chris Evans]

The hon. Gentleman has spent 30 to 40 years in this House going on about the European Union. All his birthdays must have come at once on 23 June—that is all I can say! [Interruption.] He knows the answer very well. I think he is trying to create a bit of mischief for me.

Essentially, we need to ask whether this will mean the loss of passport rights. What structures will be put in place to allow people to continue doing business and paying their taxes? Banks and the financial service industry simply need to know that.

I am short of time, but let me say that my second key concern that generates uncertainty is the extent of EU-originated law that now governs financial services. The law itself, of course, is not the issue, but what replaces it and the process by which it will happen is still a mystery. It is hard to find reliable information to quantify the extent to which EU law governs the UK financial services sector. However, since the EU implements many international regulations and agreements relating to the financial services sector and the UK relies on that body of law, leaving the EU can raise questions.

Ultimately—I am running short of time—it is no good for the Prime Minister to come here and, when she is challenged, to say every week, “Brexit means Brexit.” It is no good her saying that she is not going to give a running commentary on the negotiations either. The financial services industry needs certainty. It needs to move on, and it is time that the Government came up with some answers to the questions I have raised today.

Bank Branch Closures

Chris Evans Excerpts

Thursday 30th June 2016 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate the hon. Member for City of Chester (Christian Matheson) on shepherding me and the hon. Member for Wells (James Heappey) to the Backbench Business Committee to secure the debate. I thank the Committee for allowing us the opportunity to have this debate, which is important. It is always a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). We agree on most things rural; our constituencies are not dissimilar. I was touched when the hon. Member for Clwyd South (Susan Elan Jones) described that nonsensical hypothesis and the threshold of 15,000 people, and I instantly started to think about my constituency. No community there would reach that level, except the town of Aberystwyth and that would be seasonal—it would depend on a lot of students. I say that to illustrate the challenge of rurality.

The debate has been very good. We have heard about the cities and what I call semi-rural constituencies. I am going to talk about my constituency, which is particularly rural. It is 1,795 sq km, it has 147 villages and hamlets and 700 family farms—one large community. The hon. Member for Wells described Glastonbury, without the 200,000 visitors, as a smallish town with 10,000 people. A town of 10,000 people in my constituency would be a metropolis. The scenario is very different, but the people there have the same entitlements and same needs and they are still being let down by the attitude and practices of the commercial banks. That has been the message in almost every contribution that has been made.

In 2011 I spoke in a debate in this place about bank closures. The number of branches had halved, from 20,000 in 1988 to about 9,300 then, and that figure has dropped further since. We can have a debate about the reliability of statistics. That is perhaps something on which the banks themselves should reflect, but the University of Nottingham report—the right hon. Member for Tottenham (Mr Lammy) alluded to this—said that

“the rate of closure has slowed more recently”

and that seems to be the case only because of

“the much reduced stock of branches”.

Hardly a positive sign.

The decline is certainly not abating in rural areas. Over the past year, more than 600 bank branches have closed and now 1,200 communities have lost all their banks, putting our high streets and market towns in jeopardy. That is something the banks said would not happen—they said the last bank in the town would stay one way or another.

None of us can deny that there has been a shift in how many people access banking services. For many, that has led to more options and more flexibility from mobile and online banking. According to the British Bankers Association, mobile banking apps have become the No. 1 way that people bank, with 22 million downloads of banking apps, and that is forecast to increase hugely over the next few years. Like the hon. Member for Ynys Môn, I have a cheque book. I will keep it going as long as I can, or as long as the banks allow me.

Many businesses will bank either through call centres or distance banking relationship managers. I always think the description “relationship manager” is slightly inconsistent. The notion is that constituents of mine in west Wales will have a relationship manager in Swansea or Bristol—look at a map; it is a long way away. There is a disconnect between them and as a result local businesses suffer and sometimes the advice that is given can be problematic. The requirement is for local managers who understand the business in the area. That is hugely important and can make a huge difference to the small and medium-sized businesses that they are there to serve.

The issue of broadband and mobile coverage is hugely important. My constituency is in the bottom 10 in the UK in terms of broadband speeds and actual coverage. Next Wednesday, I have a debate in Westminster Hall, for those who are interested in that matter in a Welsh context. That is hugely significant for the debate we are having as is the issue of physical access to a bank. I live six miles from the great metropolis of Aberystwyth. I have the luxury of a car; I own one. I have the luxury of a train and a bus.

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

Stop bragging.

[Mr Williams]

I do not own the bus or the train, I hasten to add. I have that luxury, but most of my constituency does not.

Two weeks ago, HSBC notified me—it sent me a letter—rather than consulted me of the fact that the Aberaeron HSBC would be shutting in September. They did not ask my opinion beforehand when they came to see me and the local councillor, Elizabeth Evans, to discuss the branch closure. This is a significant community and a tourist community—not on the scale of Glastonbury, but a significant community on the west Wales coastline. Local businesses need the bank—it is essential—in order to cash their takings. The closure is simply another nail in the coffin for that vibrant community.

In respect of the protocol, this is an instance of putting the cart before the horse. We were told that arrangements would be put in place before the closures happened, but we left that meeting still very unsure about whether the town of Aberaeron would have any cashpoint provision. In case HSBC is listening, if it is still intent on moving the bank to a local store there is a challenge: the pressure is on to provide us with at least a cashpoint machine in the town.

There have been two cashpoints in Aberaeron in the past. The hon. Member for Clwyd South mentioned the railway in her community. People can arrive there anticipating their railway trip for the weekend and find that they have no money and no means of accessing money. That happened in Aberaeron when the two cashpoints dried up. Visitors as well as locals found that they had no access to money in that community, raising the spectre of a long drive elsewhere.

With the continuing loss of bank branches, the importance of post offices has grown substantially, with more post office branches now providing banking facilities. We are told that 99% of the population live within three miles of a post office branch, with over 11,500 branches nationwide. All of those branches handle automated transactions, offering “cash-in and cash-out” banking services. Although the services provided by the Post Office are welcome and the initiator of this great idea should be commended—it is important and is providing more than a stop-gap—by the Post Office’s own admission, post office branches

“cannot offer the high value, complex and regulated financial services previously offered to the bank’s customers.”

Where can a customer receive financial advice or take out a loan in an area that has no local bank branches and a post office branch is the only access to banking? These are things that neither post office branches nor internet banking services can provide in the way that I think is still required—in a personalised and focused manner.

One of the successes of the previous Government was that the post office network was retained after years of decline, with a commitment to keep 11,500 post offices. However, that has not necessarily stopped closure. What has happened is that the word “closure” has been replaced with the idea of “movement to somewhere else”. If high street bank branches close and post offices follow, rural communities will be hardest hit. With relatively limited public transport making it harder to travel far and with rural areas having the weakest broadband speeds, our rural population is being financially left behind. As we have heard, there are age and demographic issues because not all people are capable of accessing the internet even if it is available.

When banks move into post offices and post offices move into shops, we need to recognise that those places were not designed with bank transactions in mind. There is considerable concern about privacy and security, which will be particularly off-putting for local businesses and elderly residents who rely on face-to-face transactions. Another positive move was the access to banking protocol, but I can only concur with the eloquent and passionate remarks of the right hon. Member for Tottenham on that issue. The protocol was good as far as it went, but it did not go far enough. It has not been monitored and I think it has been breached. I look forward to the review when it happens. When the protocol was announced, my former colleague, Vince Cable, said that

“banks have a duty to ensure that all their users and especially vulnerable customers, small businesses and those in rural communities can continue to access over the counter banking services.”

That is extremely important, and we look to the Minister for reassurance that a renewed protocol to address those concerns will be robust and will be enacted.

As well as the Aberaeron branch, we have lost a number of others. The roll call is significant. We have lost banks in Llandysul, New Quay and Tregaron. Tregaron is a particularly notable example, because following the closure of the Barclays branch there, customers face a 22-mile round trip to the nearest branch in Lampeter. It is not good enough for a bank to put a poster in a window, or on a boarded-up window, telling people that their nearest branch is X miles away. That closure has hampered local businesses, and local residents have felt the loss of face-to-face services. New Quay/Cei Newydd, in my constituency, has lost its last branch, although the town has a huge population in the summer because of all the visitors.

I could go on, but I will not do so. Others want to speak, and we want to hear from the Front Benches, including, of course, the Minister. Let me end by saying that rural communities are going through very challenging times. There is a characterisation of the high street in a small market town, involving banks, post offices, shops and readily available public transport—buses that stop and take people to their destinations. I do not want to be a Luddite; I do not condemn the march towards a digital economy, with services that can be accessed online and business that can be conducted by means of a call centre rather than face to face; but there is a universality in that, which does not currently apply to all rural areas. Perhaps it will in the future, given technological advances. Perhaps we will all be content to sit in our homes, not talking to each other and playing on computers. But we are not there yet.

Rural areas are being left behind. Broadband, and broadband speeds, are not equitable across the country. A generation of people, and certain businesses, depend and rely on physical banking. I sincerely hope that, if the way forward is the access to banking protocol review, the realities of rurality—the reality of the 20% of us who live in rural areas—will be considered.

The hon. Member for Wells ended his speech by using the phrase “fair play”. In Welsh the phrase is “Chwarae Teg”, and we demand that too.

--- Later in debate ---

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

It is a pleasure to follow the hon. Member for East Lothian (George Kerevan). I hope that Mr Ross McEwan meets him really soon because I can see the hon. Gentleman’s passion on this issue. I pay tribute to my hon. Friend the Member for City of Chester (Christian Matheson). I know how deeply he feels about this issue and how he has been campaigning for this debate through the Backbench Business Committee. I am pleased that his campaigning has come to fruition. It would be remiss of me not to mention the hon. Member for Wells (James Heappey).

We found out today that the hon. Member for Ceredigion (Mr Williams) is lucky enough to have access to a train, a bus and a car. He represents a beautiful part of Wales and I always like hearing him talk about places in his constituency because that reminds me of my childhood holidays and good memories come flooding back. I also pay tribute to my hon. Friend the Member for Ynys Môn (Albert Owen), who has again shown his passion and devotion to his island constituency. His fantastic speech was one of the best that we have heard in the Chamber for a long time and I thank him for it. It would also be remiss of me not to mention another Welsh colleague, my hon. Friend the Member for Clwyd West—

[Susan Elan Jones]

Clwyd South.

[Chris Evans]

I promised my hon. Friend before I stood up to speak that I would not say “Clwyd West”, but I knew I would get it wrong. My hon. Friend the Member for Clwyd South (Susan Elan Jones) has been a good friend for a number of years. Like my hon. Friend the Member for Ynys Môn, she cares about these issues. I thank her for her passion and for the strength that she has shown, especially this week, given the difficult circumstances.

Sadly, the debate has come at a bad time for me. Only last night I received the terrible news that yet another bank—Lloyds in Newbridge, a town in my constituency—is to close in October. That follows the closure earlier this month of HSBC in Risca, another town in my constituency. Sadly, such closures are not unique to my constituency. They are widespread throughout the whole country, and some sections of society are experiencing a considerable loss. The BBC reported in May that between April 2015 and April 2016, more than 600 bank branches were closed across the UK. More have closed since, including that HSBC branch in Risca, and soon there will be that closure in Newbridge and others across south-east Wales.

Local residents are being given the usual reason by their bank, namely that more customers are turning towards online banking and footfall at branches is falling. It is hard to deny that online and telephone banking are on the rise. Although I use bank branches from time to time, my own daily banking needs are usually met over the phone or through an app. This trend is underlined by Barclays, which says that on average its customers use mobile banking more than 28 times a month, but visit their local branch less than twice in that time. The banks say that it therefore makes commercial sense to close branches that are expensive and not being utilised enough to justify their cost. When I worked in banking in the early part of the 21st century, I noticed that footfall was going down, but the banks were not really very nice places because we would have a customer’s arm up behind their back trying to sell them as much as we could as soon as they walked through the door.

If we look only at statistics and reduce customers to numbers on a graph or spreadsheet, saying that they are only one of a minority who do not use online or telephone banking, we ignore the cost and the burden that closures place on the individuals who are left out. When we dig a little deeper to see who exactly loses out the most from the closure of a bank branch, it is almost always the most vulnerable in the community. I have spoken in the House about the perils of payday lending, legal loan sharks and doorstep lenders. If someone needs a loan, they will trust the person at the door if there is no bank at the end of the road to meet their borrowing needs. That is the danger. When a bank closes a branch, that person, who is usually unbanked, becomes even more vulnerable than they already are.

I have to make an example of HSBC and the branch closure in Risca. When I launched an online petition, which was signed by hundreds of residents, some of the comments truly summed up the problem with branch closures. One constituent said:

“My parents use this bank. If this branch closes they will not have a branch within a 5-mile radius. The nearest branch will be at least 30 minutes away by bus. Both of them are in their 70s and cannot use internet banking as they have no internet connection nor computer. They are hard of hearing, so telephone banking is also out of the question. How are customers like them supposed to deal with any issues if they cannot speak to someone face to face?”

HSBC’s closure of Risca’s branch was bungled, and the same goes for branches all over the country. The first I heard about it was in an email on a Friday night. I was told, “Do not say anything, because we have not told the customers or the businesses. Keep it to yourself.” I wrote to the bank and asked for an exact closure date and when it was going to be announced, but I was met with silence. It was only when I put it in the press and set up the petition that HSBC wanted to talk to me. Even then, it was like pulling teeth.

I asked to speak to the chief executive—like the hon. Member for East Lothian did with RBS—and I was given a regional director who popped by in Risca for the day. Guess what I found when I walked into the HSBC? Did I find a branch on its last legs? Did I find a lack of staff? No, people were queuing out the door to use the services. The average age of the people was 70s or 80s and they were complaining that the branch was going to close, yet the representative was in the office telling me that no one was using the service. Who am I supposed to believe?

Another thing that I have to say about HSBC is that when it did finally put out a press release, it told me that footfall had dropped by 70% in Risca. That was very good, and I accept that, but when branches were closed in the constituency of my hon. Friend the Member for Rhondda (Chris Bryant) in Porth and Tonypandy and in the constituency of my hon. Friend the Member for Ogmore (Chris Elmore), the bank said exactly the same thing: footfall had fallen 70% as well. I am sorry, but I do not believe that figure.

[James Heappey]

The hon. Gentleman makes an excellent point. The difficulty is the ambiguity over the definition of “regular users” that the banks try to use in their impact statements. I am not absolutely sure what it is, even though I spent some time researching for today. There needs to be a clear definition of what a regular user is so that the number in an impact statement can be interrogated.

[Chris Evans]

I totally agree. When I go to a bank that is about to close, I want to know the exact figure. I want to know what the footfall is even if that means just clicking the numbers as people walk through the door. At least then there would be some raw data that could be used to justify a branch being closed.

There is also a social impact. Risca once had several banks and building societies, including branches of Lloyds, HSBC and Barclays. Lloyds and HSBC have now closed, leaving the town with one remaining bank, which is fortunate because people still have the option of moving to Barclays if they want to continue to bank locally. What happens if, as in so many communities up and down the country, Risca or Newbridge lose their last remaining bank as the long trend of bank branch closures continues, as predicted by fintech companies?

I say to my hon. Friends the Members for Ynys Môn and for Clwyd South and the hon. Member for Ceredigion that I am lucky in Islwyn because we have good transport links. We have a trunk road that goes right through the constituency, the bus service is good, and there is a new train service. People can get from town to town. However, Ceredigion, which is a huge constituency that I know quite well, Anglesey and Clwyd South all have country lanes and one-track roads. How can people get from one branch to another? It is a major outing for many people.

Before a bank closes, it is imperative that a full assessment is carried out of the impact that the closure will have on the local community and that local stakeholders are consulted. Steps have been taken. In March 2015, banks published their access to banking protocol, which laid out their commitment to ensure financial inclusion and to undertake an impact assessment through community engagement when a branch closure was planned. I look forward to the publication of the independent review led by Professor Russel Griggs of how banks have implemented the protocol. In my anecdotal experience, however, they have not. They have been found absolutely wanting.

It is very clear that some banks provide a better service than others. For example, I compare the closure of Barclays in Newbridge with the way that HSBC was closed in Risca. When I see something good, I say so. The way that Barclays managed that closure was far better than what happened at Risca. Barclays had the raw data, there was a point of contact, it spoke to all the customers, and I pay tribute to its community relations manager, Jonathan Brenchley, who was fantastic all the way through that process. The great thing about him is that if customers have a problem, they can pick up the phone to him and he will deal with it. It is an example that many other banks should look into.

In May 2013 Barclays launched its Digital Eagles programme, which is designed to support and educate customers to help them feel comfortable with using digital channels not only for their banking, but in all aspects of their lives. So far it has trained over 16,000 Digital Eagles across the country and has held 5,200 learning sessions. The expansion of such programmes among other banks would be a very important step towards ensuring that nobody was left behind as banking changes.

However, switching to online or telephone banking alone will not be enough to ensure that nobody is badly affected by branch closures. The parents of my constituent, who have no computer or internet, should not be expected to buy a computer, and their hearing problems make telephone banking an obstacle. If they are to keep their independence as more bank branches close, banks must move towards a model whereby the bank will go to the customer if the customer cannot get to the bank physically, digitally or otherwise.

I pay tribute to NatWest for its service, which is akin to a mobile library. Its van turns up once a week in hard-to-reach communities so that people can do their banking there. A promising solution might be a vast expansion of mobile banks which, although they are not perfect, could at least dampen the impact of bank closures. Customers who seek the kind of banking and financial advice they would otherwise receive at a branch should have the option to request one-to-one meetings with bank staff, either at home or in a nearby public space, such as a library.

It is important to remember that among the biggest customers of local bank branches are small businesses, with regular trips to their local branches to make deposits. The closure of branches means that they have to go further and further and waste precious time when they could be chasing sales and business. If time is money, they are certainly losing out. As in the case of personal banking, I believe banks must change their approach so that they are the ones to come to the customer. In January 2016 Barclays introduced a Barclays Collect service, which will travel directly to business and corporate customers to collect deposits directly from their door. I welcome that news. Barclays plans to roll out the scheme more widely next month. I hope the scheme is successful and that other banks follow suit.

We have to consider other options, and credit unions must be part of the mix. Earlier my hon. Friend the Member for Harrow West (Mr Thomas) said that in the new banking world credit unions must play a role. They will bring people to banking. I know that the Minister has been a champion of credit unions in the past. They bring people to banking, but very often they are the victims of their own success. Because they are voluntary organisations, when they get huge they get even more difficult to manage, as people do not have the necessary skills and experience.

Credit unions do not know where to go as they get bigger. I think building societies have a role and should offer back-up to credit unions, as should post office credit unions. There is much work to be done in credit unions, but there needs to be a next step for them, such as the opportunity to become a community bank, a post office-style credit union, or even a building society. I urge the Minister to look into this. Legislation is needed to enable huge credit unions run by voluntary staff to become the new banks or smaller community banks or building societies. I hope she and her officials will give some thought to that.

We need to start thinking about the social impact when a bank closes. The premises usually remain vacant or become a pub, for example, which is a waste.

[Mike Wood (Dudley South) (Con)]

In my constituency, rather like in the hon. Gentleman’s, Lloyds Banking Group announced two further bank closures yesterday. He is speaking movingly about the impact of bank closures on our communities, but that impact also extends to the staff. Does he agree that banks need to do far more to redeploy staff, and, where redeployment cannot take place, to make sure that retraining and support are in place so that staff are treated fairly?

[Chris Evans]

As a former employee of Lloyds TSB, as it was in those days, I have every sympathy with any member of a bank’s staff who is made redundant.

To go back to my earlier point, I hope the Minister will think about a piece of social legislation that says that banks should offer members of staff to credit unions, to give those organisations the expertise and professionalism they need to manage once they get bigger. There is a real space there for some action.

Banking is changing, but banks have to change with the times; they have to reach out to the customer and to find new ways of delivering their services. I come from a banking background, and I know that things are not perfect, but today’s debate has given me hope that all of us in the House want the best deal we can get for our constituents and for the customers of banks.

--- Later in debate ---

[Harriett Baldwin]

The hon. Gentleman is right to pay tribute to the wonderful staff up and down the land who staff our bank branches. The older members of our communities really value that interaction. It can be very important in protecting them against some of the online fraud, which, we have to acknowledge, targets older customers.

It is clear from the points raised today, and from the regular discussions I have with Members, that we are all in agreement that bank branches are an important part of the solution when it comes to access to finance for our local communities. It is one of my top priorities as Economic Secretary to ensure that financial services work for everyone and that they are on the side of people who want to work hard, do the right thing and get on in life. Having a good branch network is part of that. The role of banks in society is essential. I am glad that that has been acknowledged today.

In the interests of time, I want to just highlight some of the issues raised in the debate. First, in the past year we have made significant progress on access to banking services by improving access to the basic bank account. Many more banks now offer that. We have also reduced the practice of charging for failed payments, which was unacceptable. The industry has moved forward on that. I pay tribute to the hon. Member for Walthamstow (Stella Creasy). She has not participated in this debate, but she made such an impact in terms of bringing payday lending under the regulation of the FCA and the progress we are making on that. There has been much discussion about the access to banking protocol.

[Chris Evans]

Does the Minister know of my interest in real-time credit scoring? Has she had a chance to look at that?

[Harriett Baldwin]

The hon. Gentleman knows that that is worth a whole Adjournment debate in itself, so I will talk about the access to banking protocol instead.

The protocol means that when a bank decides to close a branch it must think carefully about the consequences of doing so, particularly when it is the last bank in town. We have heard today—this debate is timely—that Professor Russel Griggs has been appointed by the BBA to review how it has been working in its first year. All the points raised by Members will be excellent submissions to that review. I hope he will take the opportunity to meet hon. Members to hear at first-hand the feedback on the independent review of the protocol. I would like practical recommendations to come out of the review on how we can move forward. I think we all recognise there will be an ongoing review by banks on how they can best use their branches.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 7th June 2016 Commons Chamber

[Mr Osborne]

I completely agree with my hon. Friend, and I know how much she champions skills in her constituency in Wiltshire. The apprentice levy, which has now been legislated for, will ensure that we are able to increase the number of apprentices in this country towards the 3 million that we committed to in the manifesto. Crucially, more money will go into skilled apprenticeships in fields such as design and engineering. She wants to see more of those, and so do I.

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

Many constituents of mine, including those working at RF Brookes, tell me that their employers are attacking their terms and conditions because of the national living wage. Does the Chancellor agree that this abuse should not go on as it is giving constituents of mine an overall pay cut?

[Mr Osborne]

We certainly expect businesses to pay the national living wage and to honour not just the letter of the law—we have increased enforcement of the living wage through HMRC—but the spirit of it, which means that employers should pay that wage and not find ways to cut other allowances to make good on the pay bill.

Budget Resolutions and Economic Situation

Chris Evans Excerpts

Wednesday 16th March 2016 Commons Chamber

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

When the Chancellor of the Exchequer was appointed to his post nearly six years ago, he was faced with several challenges: a record deficit, an increasing number of welfare claimants, and the fallout from a banking crisis of a scale that had not been seen since the 1930s. Along with each of those challenges, the Chancellor was faced with an opportunity. He could have reformed the tax system, changed the terms of welfare forever, and restored confidence to our banking system. However, he wasted each of the opportunities that accompanied those major challenges.

For a start, the Chancellor failed to tackle the deficit by 2015, although in 2010 he had confidently predicted, at the Dispatch Box, that he would. The plan, we were told then, was to start paying off the national debt by the end of the last Parliament. In the emergency Budget statement that he delivered to the House on 22 June, he went so far as to claim:

“The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16 in this Budget.”—[Official Report, 22 June 2010; Vol. 512, c. 167.]

Here we are at the beginning of 2016-17, and the budget deficit stands at £72.2 billion. Now the Chancellor tells us, in all hope, that he will turn that into an absolute surplus of £10.4 billion in 2019-20. It is Cheltenham week, and I wonder who will win the wager that he will achieve that.

The only conclusion that can be reached is that austerity has failed to produce the growth and the tax receipts that we need if we are to end the deficit and begin to pay off the national debt. I believe that there are two solutions. We need tax reform in the short term to ensure that tax is collected efficiently and effectively, and we need to increase radically long-term investment in new and emerging businesses. The Chancellor is intent on cutting public services by £8.1 billion by 2020-21, but what is he doing to ensure that the large multinational companies that do business in our country pay their fair share of tax? Is it fair for a small business to face demands and eventual court action for non-payment of tax while a corporate giant like Google can negotiate with HMRC? Of course it is not.

The cases of Google and Facebook demonstrate that corporation tax has had its day. The UK Government raise about 7% of their revenue from corporation tax, but much of that would be collected as income tax on dividends even if corporation tax did not exist. Taxing companies locally on a fraction of their worldwide income calculated by reference to their domestic activity could be one solution to this issue. Alternatively, the Government could be bold and radical and abolish all tax incentives and other loopholes, making it almost impossible for anyone to avoid paying their fair share of tax.

The Chancellor should look at ways of spreading wealth to the regions that are traditionally reliant on the public sector, such as the north-east, Northern Ireland and, yes, Wales. As someone who travels across the Severn bridge on a weekly basis, it would be churlish of me not to welcome today’s announcement of the halving of the Severn bridge toll. However, I must qualify my welcome by saying that I wish the proposal had been for the maintenance-only toll for which my hon. Friend the Member for Newport East (Jessica Morden) has been campaigning for years. We look forward to hearing the details, but I really wish that, rather than the cut being introduced in 2018, businesses could benefit from it this evening or tomorrow.

HMRC estimates that in 2015-16 there are 3,000 additional rate taxpayers in Northern Ireland, 4,000 in the north-east and 5,000 in Wales. In Wales, additional rate taxpayers pay £302 million in income tax. I urge the Government to look at regional tax rates tailored to encourage people to start up businesses in areas such as Northern Ireland, Wales and the north-east. That would also encourage wealth creators to relocate to those areas.

However, tax reform will go only so far towards paying down the deficit. Whether the Government like it or not, they have to put their money where their mouth is. In the future, we will face challenges ranging from ageing to climate change to antibiotic resistance, and it will be our researchers and innovators who are at the forefront of sustaining our way of life, as the hon. Member for Macclesfield (David Rutley) has just mentioned. We have a responsibility to safeguard both the quality and the productivity of our science base to ensure that we are in a position to meet those challenges. In our increasingly knowledge-based economy, the pursuit of excellence in research and innovation will be at the heart of effective strategies for sustainable growth, increased productivity, competitiveness and the creation of high-value jobs. This is the nation that broke the Enigma code and discovered DNA. Our competitors across the world recognise the value of the knowledge economy and are investing heavily in science, technology, research and education. If we want to remain world leaders in tomorrow’s knowledge economy, it will not be enough to ring-fence the science budget. We need to increase it and invest more in it.

I turn now to the final challenge. Despite being given a mandate to reform welfare, the Government have failed to grasp the problem. Focusing on jobseeker’s allowance, they have peddled the myth that most of the money goes on unemployment or incapacity benefits. In fact, 47% of UK benefit spending—£74.22 billion a year—goes on vital state pensions, which is more than the £48.2 billion that the UK spends on servicing its debt. That is followed by expenditure on housing benefit of £16.94 billion and on disability living allowance of £12.57 billion. Jobseeker’s allowance is actually one of the smaller benefits, with £4.91 billion being spent in 2011-12, an increase of 7.6% on the previous year. We can no longer tinker around the edges of welfare reform. The budget is getting too huge. We need a cross-party report that all the major parties can sign up to—a modern-day Beveridge report, if you will—to seek solutions to how benefits can be delivered in a way that reflects the modern world.

Nothing rouses the anger of the British public more than the banks. Following the financial crash of 2008, banking reform was at the top of the agenda. Sadly, this Government have been found wanting. Just this week, HSBC announced plans to close its local branch in Risca in my constituency. Already, hundreds have signed a petition expressing their anger at the closure. On four occasions over the past five years, HSBC has threatened the Government that it will leave this country, yet it does not even think it important to consult the local community before closing a branch.

The Financial Conduct Authority launched a review into banking culture, but it has now been scrapped, despite the fact that customers and taxpayers are still paying the price for the failed culture in the banking sector that has been widely attributed to be one of the main causes of the crash and the scandals over LIBOR and price fixing. We need to introduce competition into the banking sector to finally challenge the dominance of the big six banks. A start could be made with real-time data sharing to help consumers and promote competition. It is vital that better and more accurate information is shared more quickly and that banks’ current account and credit card account data, which are currently excluded, should be shared if consumers want them to be. Banks have an incentive to stop those improvements. The case is strong for regulation to make safe and effective sharing happen.

As we have seen across the world, such as in the rise of Donald Trump and Bernie Sanders in America, the public desperately want change. The Government’s response, which has been the same since they were elected, is business as usual. To people all over the country, business as usual is just not good enough any more. The system has a sense of inherent unfairness. People who are not on benefits or rich enough to pay their way out of the system are fed up with the same old slogans. They are angry and they want change. This Budget is the latest in a long line of wasted opportunities. In the light of all the evidence, it is time for the Government to rip it all up and start again.

Real-time Credit Scoring

Chris Evans Excerpts

Tuesday 2nd February 2016 Commons Chamber

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

Thank you for calling me to speak, Madam Deputy Speaker; it is a pleasure. I have been in this House for six years in May, and this is the first time I have ever been granted an end-of-day Adjournment debate.

I am delighted to have the opportunity to debate the topic of real-time credit scoring. For me, this is a very important issue, especially in the wake of several financial scandals over the years. The financial crash of 2008 proved one thing—that banking needs reform.

Whenever I think of banking, I think of the need for reform. Most people who use banks will want to borrow money and, unfortunately, personal lending and personal loans are the last area to be considered for reform by the Government.

Real-time credit scoring makes complete sense. The term describes the sharing of data from the credit reference agencies in real time or as close to real time as possible. This requires sufficiently up-to-date and complete relevant data from all the banks and financial institutions. People expect choice in any walk of life. It is what our system is based on. In the market for personal loans, the choice is too narrow and too clearly focused on the banks. Real-time credit scoring would shake up the market and bring about real change for consumers and banks.

The Financial Conduct Authority is looking at the issue. The case for regulation to enable data sharing to happen safely and effectively is compelling. If consumers could ask their banks to share real-time data about their account with a prospective lender, lenders could assess affordability more accurately, meaning that they could make more capital available to consumers with lower risk, thereby driving down cost.

[Julian Knight (Solihull) (Con)]

I congratulate the hon. Gentleman on securing this debate on a very important topic. I support his call for real-time credit scoring, which needs to be explored further. In my previous occupation as a financial journalist, I dealt with a lady who got into £107,000 of debt in three days, following a relationship breakdown. If real-time credit scoring had been in place on the high street, she would not have got into such enormous debt, which caused further mental health issues. Perhaps the hon. Gentleman will reflect on that.

[Chris Evans]

I will develop that argument further. The hon. Gentleman identifies the nub of the problem—the delay in credit scoring needs to be addressed. That is common sense and I hope the Government will grasp the nettle.

[Yvonne Fovargue (Makerfield) (Lab)]

I congratulate my hon. Friend on obtaining this debate. Does he agree that it is not just consumers who would benefit, but new entrants to the market who are lending for the medium term would be able to come in without having to buy two databases: the payday loan database, which operates in real time, and the other database that operates for banks and other financial institutions, which is at least a month behind?

[Chris Evans]

My hon. Friend speaks with some expertise. I pay tribute to the amount of work she has done on payday lending and raising the issues associated with it. She is right. The real problem is that the banks have a stranglehold on lending. They jealously guard their data and they are suspicious of the Data Protection Act. They therefore keep out of the market major competitors who could bring down interest rates, which is what we all want to see.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman is very gracious and I thank him for giving way. Credit risk is one of the top issues in financial services and there is a need for services to be automated. Is there a possibility through real-time credit scoring to provide new, exciting jobs in a well-paid high-end market? That would be a plus, if it was done in the right way.

[Chris Evans]

The hon. Gentleman is right. The more competitors there are in the market, the more jobs and the more specialised jobs there will be. I pay tribute to the hon. Gentleman, who speaks on every single topic. We have often joked privately that Westminster Hall is his lounge in the morning, as he speaks there so often. Coming from Northern Ireland and Wales, which have great similarities—both are heavily reliant on public sector jobs—the hon. Gentleman and I know that real-time data sharing and more competitors in the market would bring the private sector jobs that areas such as mine, his and the north-east are crying out for.

Currently, consumers pay the high costs in two ways. Consumers who can afford credit pay more than they should, and consumers to whom lenders ought not to lend are able to access credit even when it is not affordable. Better data would reduce both these problems, to the benefit of all concerned. So who would be the big losers if the Financial Conduct Authority acts? The banks and the incumbent lenders, but I do not think they would be losers. They would have to up their game and offer innovative products such as those that the hon. Gentleman mentioned. The FCA should also be ready to act in the teeth of resistance and entrenched interests, to further the interests of the consumer and our constituents.

I want to provide some background information to data sharing in consumer credit markets. An important interaction in the consumer credit market is the way in which lenders, particularly unsecured lenders—or, as we know them, high-cost, short-term credit lenders—assess a prospective borrower’s creditworthiness before agreeing whether to lend to them and setting the terms on which the loan is made. Lenders rely on information about a borrower’s creditworthiness from a range of services, including information supplied directly by the potential borrower as part of their loan application and information obtained from credit reference agencies.

Credit reference agencies aggregate information about the individual borrower’s personal information, past credit history and current credit commitments, and they supply that information to lenders on commercial terms. The three main credit reference agencies in the UK are Experian, Equifax and Callcredit. The way in which credit reference agencies aggregate and supply information is not regulated by the FCA, but operates on an industry-wide reciprocal basis. There is no requirement on individual lenders to share information, and although banks, which hold the most critical current account information, have the most detailed overview of a customer’s financial position, they do not in general supply data to credit reference agencies—of course not, because the data give them a leg up into the market and an advantage over other providers.

Veritec states that payday lenders have, as we all know, consistently failed to act in the best interests of consumers. Previous efforts to allow the UK payday lending industry to self-regulate have not succeeded, and tragic cases have come to light whereby individuals have become trapped in a downward spiral of debt through multiple, simultaneous loans. The actions of payday loan companies should be monitored by the FCA, and a database with real-time information on existing loans is required.

I do not want anyone to think that I want short-term lending to be banned. It is a massive industry that creates jobs for people. There is obviously a need for it, otherwise there would not be so much money in the market, but I believe that tools have to be made available so that decisions can be made about creditworthiness.

Crucially, not all lenders report data to more than one credit reference agency, and a reliance on credit reference agencies has played a key role in the downfall of the implementation of FCA rules and consumer protection. It is disappointing that the FCA will not consult on real-time data sharing requirements at this time.

Only a database with real-time information on existing loans will protect consumers from potential harm. A system should be considered real time only if every inquiry and every lending decision is updated instantaneously across 100% of the market. That would allow for lenders to know immediately if a consumer is eligible for a loan under the FCA’s responsible lending rules. However, the reciprocal principles that underpin data sharing require that lenders provide data to credit reference agencies “on a regular basis”, usually a minimum of once a month. Even where data are provided monthly, they can be as much as 60 days old by the time they are made available to other lenders.

The fact that lenders may routinely not have access to the most recent 60 days of a consumer’s credit history creates serious consequences for competition and, above all, consumer welfare, with the potential for unaffordable levels of debt. The question as to which lenders share information is an entirely commercial decision, and it is left to lenders to assess whether it is in their interests. They do not have to take into account any other information, such as the wider benefits to consumers.

Rather than just talking about affordability, it is very important to take a customer’s lifestyle into consideration, as happens when people take out mortgages. If we had real-time data sharing, that practice could be spread right across the board in personal lending.

Incumbent lenders, such as bankers, have no incentive to share data. Banks hold the most critical current account information, and the marginal benefit of sharing information and receiving reciprocal information is very small compared with the much larger marginal benefit to smaller lenders, such as unsecured lenders, or high-cost, short-term credit lenders. That creates a very important market failure. Having unrivalled access to credit data puts the banks in a unique position in considering whether to lend to consumers, and it allows them to lend at the most competitive rate. As a result, smaller lenders and new entrants are placed at a significant competitive disadvantage. That not only restricts competition, but distorts it in favour of one sub-market over another.

In addition, that risks cutting off some consumers from access to credit altogether. If they are unable to obtain a bank loan, such consumers must either rely on other forms of credit, such as unsecured lending or high-cost, short-term credit, or make do without a loan. Lenders want to lend to such under-served customers, but for lenders to be able to offer loans at reasonable interest rates, it is essential that they can minimise the risk of default. That means conducting rigorous affordability assessments, for which they require access to complete and up-to-date credit data.

The Competition and Markets Authority considered real-time data sharing in its payday lending market investigation. In its final report, it stated that it saw significant benefits to implementing real-time data sharing, but:

“We consider that further development of RTDS, specifically the frequency of updates, would benefit borrowers and lenders and that our recommendation is not redundant”.

In response to the report, the FCA was asked to consult on a range of issues, including real-time data sharing, in the high-cost, short-term credit market. In its consultation paper, the FCA stated:

“Although we see clear benefits to real-time data sharing, we do not propose to consult on introducing real-time data sharing requirements at this time.”

The FCA’s proposed approach is, in effect, to do nothing and assume that the issues associated with real-time data sharing will work themselves out through a combination of time and commercial pressures. It is true that entrepreneurial new companies are developing systems and services that use existing arrangements that are already available to consumers, such as online banking, to offer something approaching real-time credit data. Although there is scope for technology to make sharing faster and easier, unless real-time data sharing is supported by regulatory requirements from the FCA, it is likely to be opposed as a result of commercial pressures by large incumbent lenders to prevent more effective competition.

New technological solutions show that there are few material costs to implementing real-time data sharing. IT systems are already geared to real-time data sharing, and it is clear that financial institutions can mobilise their account information to support real-time data sharing for their own purposes without any difficulty. I have also been informed of the benefits of a regulatory database. A database would allow instant monitoring of loans and of the whole high-cost, short-term credit market, which can be simplified into a traffic light system for lenders and alerts when loans are made outside regulatory rules. If all applications were processed using the database, regulators would have certainty that the rules were being followed at point of sale in store or online. In addition, because the data are not shared among creditors and are used only by the regulator, commercially sensitive information and customer data are not bought and sold.

The Financial Conduct Authority should ensure that any real-time data are used to ensure compliance at every step of the lending process. That can be achieved only if all lenders of short-term, high-cost credit report data into a real-time FCA database. The payday loan market operates best, and consumers are best protected, when a database is in place. Alongside that, high-level scrutiny and enforcement activity are required to limit and prohibit illegal lending.

The absence of real-time data sharing is important for two principal reasons. First, it is a partial cause of unaffordable personal debt. Consumers may be granted loans which they cannot truly afford, because providers do not have up-to-date information about their most recent liabilities and missed payments. Secondly, it is a critical factor that limits the degree and effectiveness of competition within many overlapping consumer credit markets, because it discourages providers from entering the market and limits their ability to compete fairly if they do enter. The FCA must revise its proposed strategy and develop long-term, future-proof regulatory solutions that promote real-time data sharing and enable the innovative use of new technology.

In our society, many people, whatever their political persuasion, believe that the Government are no longer on their side. Real-time data sharing, to me, is absolute common sense, and it can be adopted with a few simple steps. It is time, through this simple measure, for the Government to show that they can stand up to large corporations and organisations that are quite clearly trying to rig the market in their favour.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

My hon. Friend always speaks passionately on behalf of her constituents—in this case, those seeking to buy their first home. The Help to Buy ISA is, of course, available in Cornwall and will help her constituents buy their first home. The new stamp duty charge on second homes and buy-to-lets will raise money, and a portion of that will be given to local authorities and areas such as Cornwall, where there are quite a lot of second homes.

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

Low interest rates have meant that many people have had to look at other savings vehicles such as buy-to-let. Measures in the Budget will deeply affect the buy-to-let market, as the Chancellor will be aware. What measures is he taking to help elderly people looking for better savings returns?

[Mr Osborne]

There is general agreement across the House that there should be a level playing field, so that people trying to buy their first home are not disadvantaged by people trying to buy a second home or a buy-to-let property. The changes that we have introduced help to do that. Alongside that, we have made the ISA more generous and have created new pension flexibility, so that people can get the most out of their pension savings. The low interest rates, decided independently by our central bank, are part of the vital support for our economy going forward.

The Economy

Chris Evans Excerpts

Wednesday 18th November 2015 Commons Chamber

[Stewart Hosie]

I have heard that argument before. I am not sure about its efficacy and I am not going to comment on it. On the substantive point, however, there is absolutely no contradiction at all between a general attempt to decarbonise, which is the right thing to do, and a clear recognition of the costs of high energy-using industries that are of strategic importance. There is no contradiction there whatsoever.

There is one final point of failure in the UK Government’s mismanagement of the economy: last week’s announcement of HMRC closures. If the UK Government are serious about clamping down on avoidance, evasion, fraud and even error, if they are serious about reducing the £16.5 billion tax gap from small and medium-sized enterprises, if they are serious about reducing the £14 billion tax gap from income tax, national insurance and capital gains tax, and if they are serious about maximising tax yield for investment, then closing 137 HMRC offices, including almost every single one in Scotland, is a catastrophic mistake.

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

I draw the hon. Gentleman’s attention to the Public Accounts Committee report, which said that HMRC is answering less than 50% of the calls put through to it. He, like me, is a constituency MP, so he will know that the biggest frustration for businesses is that they cannot get through to HMRC on the phone. This is a real problem for small, medium and large-sized businesses. Does he condemn the cuts to HMRC as much as I do?

[Stewart Hosie]

I absolutely condemn them. That point is extremely well made. Most individuals and businesses want to be honest. They want to pay their tax. They want to go to a counter, face to face, to make sure everything is absolutely as it should be and then pay the bill. If less than half the calls are being answered now, it will only get worse. Given that in Scotland there will be no face-to-face point of contact north of Edinburgh and Glasgow—Dundee, Aberdeen, Inverness and the whole of the highlands—or south of Edinburgh and Glasgow, including the whole of the borders, this is an idiotic and counterproductive thing to do.

What are the Tories’ plans all about? As the shadow Chancellor hinted, it is ideological to insist, as the Chancellor has done, that the economy not simply breaks even but runs a current surplus hitting £40 billion by 2019-20. It is economically foolish. To do that by delivering additional welfare cuts totalling £33 billion in this Parliament, alongside £5 billion of cuts to essential capital investment—announced in the summer Budget—is, frankly, vindictive, nasty and counterproductive. In short, to cut £40 billion more than is necessary to run a balanced current budget, with almost all of it paid for by punishing the poorest and stripping the capital budget by another £5 billion, is a policy we reject. It is a policy we have already seen fail. It is most certainly a policy the people of Scotland did not vote for.

--- Later in debate ---

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

It is interesting to hear speeches in this House. Since I was elected five years ago, I have been hearing the same thing from Conservative Members. The word “conservative” means to preserve a way of life. The Conservatives live in the past, they look back to the past and they are trying to preserve it, but the old certainties have changed. Globalisation is here to stay. Whether we like it or not, the way people go about their daily lives has changed for ever. Nobody will have a job for life any more. People will work in the same job all day and then come home to trade on Gumtree, eBay or Amazon. They will not see themselves as entrepreneurs but they will live an entrepreneurial life. It is up to Government to ensure that people can achieve their opportunities and ambitions.

The No.1 problem that anybody has in this country, whether or not they go to work, and whether or not they are in high-intensive industries, is climate change. Today’s motion is actually talking about green industry. Green technology is the last best chance for this country. Highly labour-intensive jobs go where cheap labour is, and that is not here. That is why we must invest in green technology.

As is often the case, it is America that is providing the most innovative solutions. In 2006, the Californian Global Warming Solutions Act set some of the most ambitious targets for carbon reduction anywhere in the world. Emissions were to be reduced by 30% by 2020 and by 80% by 2050. It was not just the targets that mattered, because the Californian Government attacked greenhouse gases from every angle—from industry, cars, households, cities, motorways and even farms. The law impacted on them all and provided the base on which to reduce emissions. We often talk about how Government action can only go so far, and that is true, but the Global Warming Solutions Act not only changed the approach of Government, but shifted the market.

California is one of the most polluting and car-crazed cultures in the world. Its most popular car for two years running was the Toyota Prius, which lost its crown last year to another hybrid, the Honda Accord. The California example is one the UK must begin to follow. It is a fallacy to say that there is a trade-off between tackling climate change and economic growth. The Act aimed—and it is succeeding—to create a whole new clean-tech industry. It created jobs, developed cutting-edge technology, supported established companies and helped entrepreneurs.

Nearly 10 years on from the passing of that Act, California has become the developed world’s second least carbon-intensive economy. For every dollar of goods and services, it emits less carbon than any nation except France. California is a living example of what research tells us to be true—that we can tackle climate change and dramatically boost our economy.

In 2011, Google.org compared a “business as usual approach” to the American economy pursuing a clean-tech approach. The report found that such a shift would do the following: grow the economy by $244 billion a year; create 1.9 million jobs; save consumers nearly $1,000 a year; and reduce total US greenhouse gas emissions by 21% before 2030 and by 63% by 2050. We have the ultimate opportunity to develop a carbon-neutral economy that creates jobs.

In my final 30 seconds I wish to focus on graphene. It was developed by British scientists, but it is the Chinese and Americans who are forging ahead with it. Of the patents on it, 24% come from either China or America. Only 1% comes from Britain. We must encourage our firms to ensure that when we make breakthroughs such as that, they have every opportunity to develop them for commercial purposes. That is the point that I really want to make to the Government.