Oral Answers to Questions

David Mundell Excerpts

Tuesday 7th May 2024 Commons Chamber

[Jeremy Hunt]

What I would say to those families is that the most damaging thing of all is to have inflation at 11%. Now we have reduced it to 3.2%, and indeed we expect it to go lower. Interest rates are also starting to fall. If the hon. Member is worried about families in her constituency, she might be extremely worried by the shadow Chancellor saying that if interest rates fall, it is somehow not a big deal. It really is.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

May I encourage my right hon. Friend the Chancellor to revisit his decision to change the tax arrangements of furnished holiday lets in rural constituencies such as my own? Those businesses make an important contribution to the local economy, provide jobs and enhance the tourism offering. Indeed, they stop depopulation rather than adding to it. His decision is creating much concern among those who operate such businesses.

[Nigel Huddleston]

We recognise the important role that FHLs play in the tourism ecosystem right across the country. The problem was that there was not a level playing field with long-term lets. We are making sure that there will continue to be tax incentives and benefits from such letting, but they need to be on par with short-term and long-term lets.

Living Standards

David Mundell Excerpts

Thursday 1st February 2024 Westminster Hall

[Michael Shanks]

I am grateful to the hon. Member for North Ayrshire and Arran for her dedication in checking my leaflets and retaining that information; I think that is what we call “cut-through” in the political world. I accept the interesting point that she makes. She has questioned the Government on that point on a number of occasions. I think that there is an issue when somebody on £28,500 is paying more tax—those are not wealthy people. In the midst of what we have all been talking about in this debate, that is an increase in the cost of living.

On the subject of the council tax—I feel like I am relitigating a by-election that I thought was behind me for now—I opposed the proposal of a 25% increase, which was in the consultation carried out by the Scottish Government. There is a world of difference between opposing a 25% increase and announcing a council tax freeze, which will hammer communities all across Scotland. Of course, the hon. Member may be very aware of my leaflets, but I am not sure that any of her party were aware that the First Minister was going to announce that policy before he announced it, which shows just how little thought went into it.

I will get back to Labour’s new deal for working people, which is what I thought the interventions were going to be about. We have made it very clear that, in the first 100 days of a Labour Government, we want to introduce the strongest commitment to improving the lives of workers in a generation: raising wages, improving working conditions, bringing stability back to employment and enshrining workers’ rights from day one. That would undo the damage of much of the anti-worker legislation we have seen over the past 14 years.

We have also set out how we will bring down energy bills by building cheaper and cleaner power across the country, through the creation of GB Energy, a publicly owned clean energy generation company headquartered in Scotland—something that I am sure my colleagues from Scotland will warmly welcome. We will also look to reform things like work capability processes—I have raised that on a number of occasions in this Parliament—so that people entitled to benefits are not locked out of them by bureaucracy that simply does not work.

I return to the comments that the hon. Members for Glasgow South, for North Ayrshire and Arran and for Dover made about the intergenerational question, which is incredibly important. I spoke about being a teacher. Before that, I worked for a charity that worked with young people involved in gangs and offending. The route out of that involvement was often through giving people something to aspire to: a sense of hope that their future would be better than the poverty and destitution that they found themselves in. It seems to me that we are increasingly turning our backs on a generation of young people who have done nothing to cause any of the crises that they face, but who are going to pay the price of them for a long time to come.

I will briefly address the issue of disability. I draw attention to my entry in the Register of Members’ Financial Interests, as I am a trustee of two disability charities. Disabled people face higher costs of living across the board. Scope found that disability-related costs represent the equivalent of 63% of a disabled person’s income. Just by having a disability, you are already at a financial disadvantage, and the cost of living crisis has exacerbated that hugely.

I want to mention a woman who I met just before Christmas. She was forced out of her home because she could not afford to heat it any more. She had spent the past three months in the living room. She had a hospital bed where she ate her meals, had her personal care and spent most of the day because it was the only room in her home that she could heat properly. The downside was that the rest of her house became damp and infected with mould because she could not turn the heating on. She had been failed by the benefits system, cuts to her care package and rising energy and food bills. She also lost the opportunity to continue in her employment programme, which was what gave her opportunities in life.

There are countless such examples. I am sure that every one of us could recount an example from our constituents. We should be ashamed that in 2024, in a country as rich as ours, people have such a standard of living.

I want to close by saying what the hon. Member for Glasgow South started by saying: the fall in living standards is a huge crisis facing our country. It affects mental and physical health, education, family wellbeing, housing, employment—a whole range of issues. It is not going away. It has not declined. It is not getting better. It will stalk families for years to come, possibly for a generation. Debt is piling up to eye-watering levels and with it comes the impact on families. The Government have failed in basic economic tests, and working people, as always, pay the price.

I thank the hon. Member for Glasgow South for securing this important debate. I look forward to hearing what the Minister will do in the few weeks that the Government have left to change the situation for families across the country.

[David Mundell (in the Chair)]

I call the Minister. My only request is that we leave a few minutes for Mr McDonald to conclude the debate. It must end at 3 o’clock, so there is ample time for the Minister to respond.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jeremy Hunt]

My right hon. Friend the Member for Salisbury (John Glen) did an excellent job and we all salute his brilliant work. If he were here now, he would remind the hon. Gentleman that we have the lowest tax burden of any European country in the G7.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I know that the Chancellor is aware of just how important the whisky industry is to the economy of rural Scotland. It was very disappointing that the policy of a duty freeze was not continued in the Budget. Can he offer any reassurance that we will return to the policy of duty freeze in the autumn statement, and in next year’s Budget?

[The Exchequer Secretary to the Treasury (Gareth Davies)]

We are incredibly supportive of the Scotch whisky industry. In fact, the Scotch Whisky Association was my first meeting in post. In nine out of 10 previous fiscal events we either cut or froze duty on whisky, and we have acted to remove punitive tariffs on Scotch whisky in the US market. It will not be a surprise to my right hon. Friend that all taxes remain under review and he will not have long to wait until the next fiscal event.

Oral Answers to Questions

David Mundell Excerpts

Tuesday 20th June 2023 Commons Chamber

[John Glen]

The Office of Financial Sanctions Implementation works closely with our allies across the G7 to ensure that we have co-ordinated action among our international partners on this unprecedented package of sanctions. We have frozen the assets of 1,600 individuals and entities. We have implemented 35 different sanction regimes across government. I would be happy to take away the specific question that she has asked, because it is technical, and respond.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

A multimillion-pound start-up project that could be transformational in my constituency is now at risk because the Office of Financial Sanctions Implementation is yet to process an asset freeze licence application in respect of just 0.002% of the company’s capital, which was submitted in April. What steps is the Minister taking to ensure that such applications are dealt with swiftly? If I provide him with details of the company, will he ensure that the application’s progress is expedited?

[John Glen]

I am happy to take up my right hon. Friend’s case. We have expanded the OFSI resources. We have a monthly monitoring and efficiency dashboard. I accept how frustrating it can be for constituents’ businesses when such situations arise, and I am happy to take the matter away and get back to him swiftly.

Financial Services and Markets Bill

David Mundell Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Andrew Griffith]

I am going to finish this point, and then we will hear from more Members. We must not underestimate the significance of what the Bill is doing: it is taking legislative action for the first time in the more than 1,000-year history of the Royal Mint, where the UK pioneered paper banknotes in the 17th century and since we introduced the world’s first ATM in 1967. This Government—right now, today—are putting on the statute book and protecting access to cash, to safeguard the needs of those who need it.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

Like my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), I had a very useful conversation with the Minister. Will he confirm what I think he just said, which is that if it becomes clear that people do not have free access to cash across the United Kingdom, the Government will proactively intervene to make sure that they do?

[Andrew Griffith]

We talked about my right hon. Friend’s relative munificence of 53 free cash machines in his constituency—I think it was that at the last count. What he says is the case. The Bill gives the Government the ability at any point in time to give direction to the Financial Conduct Authority, the relevant regulator—this is the basis on which we regulate all our financial services in this country—through a policy statement that will set out the Government’s policy on such matters as cost and location. I am being clear that it is our expectation that the industry will deliver on this important issue for our constituents. If not, the Bill gives any future Government the ability to mandate that.

--- Later in debate ---

[Tulip Siddiq]

My hon. Friend is a doughty champion for his constituents. I will speak about that later, but I feel that we politicians have a duty on this: even if there has been a decline in the number of people using cash, there is still a small group of vulnerable people who do so, and they risk being excluded if we do not save free access to cash and face-to-face banking services. We have a duty to our vulnerable constituents, disabled constituents and those from black and minority ethnic backgrounds who still rely on cash.

[David Mundell]

I fully understand what the hon. Lady is saying, but it is not a small number of people: it was estimated in 2019 that 8 million people across the United Kingdom would struggle without access to cash.

[Tulip Siddiq]

I thank the right hon. Gentleman for his intervention. I welcome the fact that the Government have finally announced that they will bring forward access-to-cash legislation, but this Bill does nothing to protect face-to-face banking or free access to cash, which is our main concern and is what the most vulnerable in our society depend on.

Since 2015, on this Government’s watch nearly half of the UK’s bank branches have closed. It is inevitable that banking systems will continue to innovate—no one is denying that—but the failure to protect these services risks leaving millions of people behind. My amendment would empower the Financial Conduct Authority to review communities’ needs for and access to essential in-person banking services. To be clear, I am not saying banks should be prevented from closing underused branches—far from it. I explained this thoroughly in Committee but will say it briefly again now: vital face-to-face services could be delivered through a variety of models, such as shared banking hubs, which are already being set up across the country to provide cash services.

In Committee, the Minister was again very persuasive and convinced me to withdraw my new clause. He said he accepted the underlying need for action and that solutions would be brought to the table. I believed him, but despite warnings from Age UK, Which? and the Access to Cash Action Group—which does fantastic work in this area—that vulnerable people are at risk of being cut off from the services they desperately rely on, the Government have completely failed to engage on this important issue, and this time I will not be making the same mistake: I will not withdraw my new clauses. The Government need to demonstrate they will not simply abandon those who are struggling to bank online.

--- Later in debate ---

[Nick Smith (Blaenau Gwent) (Lab)]

I rise in support of new clause 10, and I am pleased to have worked alongside the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) on it, as fellow members of the Public Accounts Committee. Since 2017, I have worked with others supporting steelworker pensioners across Blaenau Gwent and the United Kingdom. Thousands of them fell victim to financial sharks. They were wrongly advised to move out of their defined benefit British Steel pension scheme. It took until last Monday, five years later, for the Financial Conduct Authority to announce a redress scheme. It was about time. The FCA righted those wrongs, but I think too late.

Early on in the campaign, I remember meeting the then chief executive of the FCA, now the Governor of the Bank of England, Andrew Bailey, where I was met with a lacklustre response. Along with my hon. Friend the Member for Aberavon (Stephen Kinnock) and other campaigners, I continued to press the FCA. In 2020, I wrote to its newly appointed chief executive, however Mr Rathi did not want to meet. He asked one of his directors to meet us instead.

Later, in 2021, frustrated with the FCA giving us the cold shoulder, I wrote to the Comptroller and Auditor General of the National Audit Office. I asked if it would please investigate the FCA’s oversight of this terrible scandal. Fair do’s, the NAO did that, and it published its full report in March this year. It observed that in the summer of 2017:

“The FCA had limited insight into…what was happening in the BSPS at the time of its restructure.”

There were terrible things going on.

Even more damning were the conclusions of the Public Accounts Committee. We found that:

“The FCA failed to take swift and effective action at all stages of the BSPS case.”

It failed

“to prevent consumers from being harmed”,

which makes clear the

“limitations with the FCA’s supervisory approach”.

The point is that the FCA took proper notice of this injustice only when Parliament, through the NAO and eventually the Public Accounts Committee, dug deep to investigate.

Of course, the BSPS case is not the only example of the FCA’s failure to protect consumers in recent years; I have heard many complaints from Members across the House. The scandals surrounding Blackmore Bond, Dolphin and Azure come to mind. Consumers are our financial sector. As long as the FCA fails to exercise its powers to protect ordinary workers, it will continue to fail our constituents. New clause 10 would require the FCA’s consumer panel to lay an official report before Parliament. We could then judge whether the regulator is fulfilling its duty to protect consumers.

During my 12 years in this House, I have learned many things, but one thing stands out: parliamentary scrutiny matters. I am pleased to have support from across the House for the new clause—from our Labour Treasury team, senior Conservative Members, the Liberal Democrat spokesperson, Treasury Committee members, other colleagues and fellow members of the Public Accounts Committee. By supporting our new clause, Britain’s consumers could be better heard, and our financial services sector would be all the better for it.

[David Mundell]

I apologise in advance to you, Madam Deputy Speaker, to the Minister, and to the hon. Member for Mitcham and Morden (Siobhain McDonagh), who tabled new clause 7, as I may not be able to be present at the conclusion of the debate, but I wanted to speak on the issue, having campaigned on it since I returned to the Back Benches, principally with my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). I am very pleased with what is proposed overall in the Bill, because during the period of covid it became clear that the system of use of cash could have collapsed. It was incoherent in the way it was managed and regulated, and we saw the potential pressures of not using cash or its usage not being permitted.

I am disappointed that my right hon. Friend the Member for North West Hampshire (Kit Malthouse) has left the Chamber, because I could not disagree more with the points that he made in interventions. We cannot simply move in an unstructured way to a cashless society. We are not ready for that. As I pointed out in an intervention, about 8 million people, whether they are rural dwellers or those living in deprived areas, rely on cash and will continue to do so. I declare that I still have a chequebook, because there are circumstances, particularly when dealing with small voluntary organisations, where a cheque is accepted. Cheques may be on the way out, but there are still circumstances where they are required. Therefore, we have to move forward at the pace of the slowest in our society.

I believe that the prospect of regulation has been very positive, in terms of forcing the banks and others in the sector to become a lot more constructive in the debates and discussions. As the hon. Member for Mitcham and Morden mentioned, the banks have been pretty disingenuous over the period. I have had many closures in my constituency, and they have often been made with undertakings that certain things would happen. For example, in the community of Lochmaben, the branch closed and the free auto-teller was to remain; now it is to be removed, two or three years on. Often the promises given are not worth very much, but I am sure that the threat of legislation, and hearing the Minister say that the Government’s position is a commitment to free access to cash, will ensure that the industry stays on board and delivers for people.

As has been set out, there has been a significant drop in the number not only of bank branches but of free-to-access ATMs, while the number of ATMs that require a fee has risen. As the Minister would expect from our lively discussion, I am in favour of consumer choice—if people want to pay for convenience, that is fine by me—but they should not have to pay several pounds to withdraw £10 from an ATM. At the core of this issue is the fact that many transactions are small transactions, not the ones that we might think of that are made of larger cash sums, which is why we have to stick to the free-to-access commitment.

Financial Services and Markets Bill

David Mundell Excerpts

2nd reading
Wednesday 7th September 2022 Commons Chamber

[Richard Fuller]

The hon. Lady is right to talk about the urgency and complexity of the issue. She understands that it is complex and will invigorate us all to move as quickly as possible. I note that even as recently as 19 August the FCA has followed up with the buy now, pay later companies to remind them of the rules that they have to operate under, and that the Government have committed to bring forward the consultation on the draft legislation before the end of the year. I look forward to discussing matters further with the hon. Lady.

The 2021 Act made legislative changes to support the widespread offering of cashback without a purchase by shops and other businesses. Clause 47 and schedule 8 go further and give the FCA the responsibility to ensure reasonable access to cash across the UK. The FCA will have regard to local access issues and a Government policy statement on access more generally. The Treasury will designate banks, building societies and cash co-ordination arrangements to be subject to FCA oversight on this matter.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I very much welcome the provision in the Bill, because access to cash is an extremely important issue not only for rural communities that I represent but for deprived areas. Will the Minister make sure that when the various reviews and mechanisms are put into place they focus on the specific needs of rural and deprived areas in their determination of cash requirements?

[Richard Fuller]

My right hon. Friend is absolutely right. He will know that the question of access in urban areas is very different from that in rural areas. I can give him the assurance that he seeks.

Access to Cash

David Mundell Excerpts

Wednesday 20th October 2021 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a great pleasure to serve under your chairmanship, Mrs Miller, and to take part in another debate on access to cash. I commend the hon. Member for Pontypridd (Alex Davies-Jones) not just for securing the debate, but for setting out the issues. I also commend my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) for his passion on this issue, which he has pursued relentlessly in Parliament and with the Minister. The Minister has always offered good grace and helpful engagement, but as my hon. Friend intimated, we are at the crunch point and need action.

In her contribution, the hon. Member for Makerfield (Yvonne Fovargue) touched on something that the Minister and I have not always agreed on. I feel that the Government have not done enough to convey the message that cash is safe. During the covid crisis, cash was no less safe than using a PIN pad and terminal. The Bank of England and many other international authorities confirmed that, and I do not think a clear enough message was given out that cash was safe. We also know that many retailers and other service providers have just used covid as an excuse to move to cashless payments, rather than there being some safety or security issue.

As we have discussed, the issues of acceptance and access are interlinked. Of course, the third key issue is the ability to deposit cash, which remains incredibly important for many voluntary and smaller organisations. To give an example from my local community, people do not go to coffee mornings, when they are allowed again, with their iPhones.

[Jamie Stone]

I thank the right hon. Gentleman for giving way—he is an old friend indeed. Does he agree that there is an additional safety aspect to somebody having to travel a long distance with a lot of cash on them?

[David Mundell]

Indeed I do, and I think the hon. Member for Pontypridd made those comments in her opening remarks. We have to have the three elements: access, acceptance and the ability to deposit. Like the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), I have a very large constituency—in fact, it is the largest constituency in the United Kingdom outside the highlands—where many of these issues of rurality are to the fore, so the issue of the 1 km within a rural context has to be properly addressed. We also have to have a better understanding of how engagement with post offices will work.

I remain very concerned about the post office network. I recently had four post office closures in significant communities, because a well-known retailer decided that it would no longer have post offices within its premises. Just glibly saying that the post office has a role might be right, but it is not as simple as that. We need to understand the basis on which it will underpin the availability of cash. I welcome the progress since the last debate, and I hope that we can achieve the same level of progress in the coming weeks, with a response to the White Paper and an understanding of the timescale. As my hon. Friend the Member for Blackpool North and Cleveleys said about the crunch, the banks have to put up or shut up. If they do not put up, we have to take the necessary action here in Parliament.

Covid-19: Government Support

David Mundell Excerpts

Wednesday 7th July 2021 Westminster Hall

[David Mundell (in the Chair)]

I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for this debate and the preceding debate. There will also be suspensions between debates.

I remind Members participating physically and virtually that they should be present for the start of the debate. Members are expected to remain for the entire debate. I must also remind Members participating virtually that they must leave their camera on for the duration of the debate, and that they will be visible at all times, both to each other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks at [e-mail]. Members attending physically should clean their spaces before they use them and as they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall debates.

[Owen Thompson (Midlothian) (SNP)]

I beg to move,

That this House has considered eligibility for Government support during the covid-19 outbreak.

I am grateful to have the opportunity to move the motion, but I find it genuinely hard to believe that we are having to have this debate again. It is now 16 months since the Government should have filled the gaps on eligibility for their covid support schemes. In that time, I and countless other Members from across the House have raised the issue of the exclusion of 3 million people from Government support. I have personally asked five oral questions, made seven speeches, submitted dozens of written questions and led three debates, yet progress has been minimal.

At the start of the pandemic, I and many others could understand the Government’s argument that it was inevitable that some people would temporarily fall through the gaps during such an unprecedented time. Likewise, I accept and welcome the instances where the Government have taken constructive steps to plug the gaps. I do not dispute that some progress has been made, so I would be grateful if the Minister does not squander his valuable time by simply listing all the things that have been done. Perhaps we could focus on where the gaps still exist.

If it is the role of the Government to protect and improve the lives and livelihoods of citizens, it is incomprehensible that 10% of the working population can be accepted as collateral damage and left to be ground down by poverty and despair by a Government who claim to be business-friendly. Instead of looking backwards at what has already been done, I want to focus on where the gaps still exist and to look ahead to what can be done to tackle the long-term effects of the Government’s decision to let temporary gaps in support become a full-blown crisis of debt, poverty and mental health.

The Minister will be well aware that over 800,000 people have been unable to access the coronavirus job retention scheme due to last year’s real-time information cut-off date. He is no doubt champing at the bit to stand up and give the Treasury a pat on the back for the decision to amend the date to November, but those affected are telling us that this does nothing to support those who missed out on furlough because of their roles as pay-as-you-earn freelancers or annually paid limited company directors. Although the inclusion in March’s Budget of the 2019-20 tax returns for calculating eligibility for the self-employed income support scheme is welcome, the Treasury’s assertion that this will open eligibility to 6000,000 more self-employed people is categorically disputed by campaigners.

Likewise, the discretionary grant funds devised by the UK Government and the devolved Governments have been effective in plugging some of the gaps in places, but the eligibility criteria vary from council to council, keeping some groups excluded based on postcode alone—some because they do not have a premises, and some because they have too many employees. The list goes on. This is something that the Treasury could fix, either by issuing clear guidance on whom councils should consider to be eligible, or by distributing its own grant scheme rather than devolving the blame.

To save the Minister a bit of time later, I am well aware of the Government’s culture recovery fund, but the scheme does not do much at all to support many of my constituents who work in the supply chain—businesses in the events sector that have remained formally open but have been badly affected by the cancellation of live events. Only 3% of the fund went to supply chain businesses in the first round. That figure did rise to 12.5% in the second round, but only because of the campaigning efforts of groups such as We Make Events. Will the Minister explain how he intends to support the supply chain businesses excluded from this fund, rather than repeat the lines that we already know?

Finally on this point, as much as the Government point to universal credit as the last resort when all else fails, the reality is quite different. ExcludedUK estimates that about 60% of the excluded have been unable to access universal credit, often because they have partners working or savings set aside for business expenditures, such as tax bills, which is natural for any self-employed person.

I hope the Minister will be grateful that we have covered what the Government have already done and that we can focus today instead on the gaps that still exist. Some gaps have certainly been filled—I have no qualms about that, and I would certainly not try to detract from it. However, the onus is now on the Government to fill the rest, and not rest on their laurels.

Plenty of solutions have been presented only to end up being dismissed for spurious reasons; they have sat on a Minister’s desk while people who could have been helped languished in stress and deprivation. For instance, proposals for a directors income support scheme were dismissed by the Treasury because of concerns about fraud and an inability to gather data on dividends, despite the scheme using the Government’s own anti-fraud gold standard and avoiding dealing with dividends at all. Where there is political will, there is always a way, and the Government have displayed nothing but a lack of political will in this.

Throughout this sorry saga, the Treasury has shown that it believes that many Members, such as myself, sound like broken records and that the excluded are nuisances trying to swindle public funds. Perhaps there is a bit of projection going on. Time and again, the tone has been nothing but dismissive. The Treasury has used blatant straw-manning to paint limited company directors as fat cats and imply that the majority are actually just directors’ children and spouses.

With the Prime Minister pressing on with the ditching of all restrictions with trademark recklessness, I imagine that Ministers are rubbing their hands with glee at the chance to redirect attention to reopening and simply to dismiss or brush off the excluded as yesterday’s news. However, if the Government think that the end of restrictions will make the issue go away, they are very wrong; for many of the excluded, the hardest times are still to come. The fact that many jobs and businesses have survived until now does not mean that they are in the clear. Those who have been excluded from support have relied on the loan schemes, so by tapering off support now the Government are exposing them to an unimaginable crisis of toxic debt.

In a Westminster Hall debate in November last year, I raised warnings from TheCityUK recapitalisation group that UK businesses will have £100 billion of toxic debt by 2021, with £35 billion of that related to Government schemes. The report warned that up to 3 million jobs across the UK and 780,000 small and medium-sized enterprises are at risk. Now we are standing at the edge of that very precipice, with many having only just managed to scrape by in meeting the first repayment deadlines for coronavirus business interruption loans or bounce back loans. How does the Treasury expect entrepreneurs to reap the benefits of an open economy when the profits of so many are simply going to go straight to repaying ever-mounting debts? How many businesses that were saved through the pandemic will fold, collapsing in debt when the health crisis is finally over? Are the Government really content with giving some companies a competitive advantage by saddling others in the same sector with debt?

As we reopen, things are more uncertain than ever for the excluded, especially with the reopening process likely to be bumpy. As long as covid is still out there, cancellations and changes of plan can create deep uncertainty. Only last week, in my own constituency, Midlothian, a Tough Mudder event that had been planned over the space of seven months was cancelled at 6.30 pm on the night before it was due to start. While the health situation remains uncertain, there must at least be certainty in support, as well as quality decision making, which was sadly lacking in the Tough Mudder case.

The excluded are not a niche group. They are the backbone of our economy: business owners and risk takers. To take one example, the events industry demonstrates its incredible potential to build a world-beating sector that boosts both our economy and our spirits. It relies on the efforts of a diverse and highly skilled supply chain of around 1 million people. Those people’s skills should be used to boost the recovery, yet so many have taken such an economic beating that they literally cannot carry on in their current roles and sectors, with 1 million people leaving self-employment in the last year alone.

For all the Government’s talk of a strong economic recovery, we have been left with a looming toxic debt crisis and the decimation of key industries and sectors. The supposedly strong shoulders of the Treasury are quite happy to shrug off millions of livelihoods, and I have not even mentioned the human cost: poverty, hunger, and a serious mental health crisis. The Trussell Trust reports that gaps in social security have driven people to food banks and that universal credit has been totally insufficient in preventing the excluded from falling into food poverty. Many are already been forced to sell their homes to repay CBILS and bounce back debt. Tragically, some have already taken their own lives. It speaks volumes that groups such as #ForgottenLtd have established formal links with suicide prevention charities such as the Samaritans. I really hope the Minister will join me in expressing a deep appreciation for the work that those charities do in supporting the excluded.

In conclusion, never before has a Government been so complacent about a debt crisis, a mental health crisis and a grave injustice all rolled into one. Let us talk about solutions: backdated parity of support; eligibility for support as we come out of the pandemic; support for repaying CBILs and bounce back debt; delayed repayments; or perhaps even a student loan-style repayment scheme that kicks in only past a certain threshold. Those are just ideas, but they are ideas that the Government need to look at now.

Will the Minister recognise the graveness of the crisis we are about to enter and commit to exploring solutions as a matter of urgency? Doing so will require striking a new tone with campaigning Members and groups such as ExcludedUK and We Make Events, so will the Minister agree to co-ordinate a meeting between the various excluded groups?

It is worth noting that the people who have been excluded watch these debates, and the last thing they want to hear today is another generic list of the people who have been supported. Not only is that a waste of our time, it is an insult to them, rubbing their faces in the injustice of the situation. It is taunting to the level of trolling. I implore him to throw away the script and speak today as though he were speaking face to face with one of the excluded themselves. He should listen to their hardships and their stories and recognise the hurt that is out there, listen to those affected and commit to working constructively to resolve one of the greatest injustices of this generation.

[David Mundell (in the Chair)]

In order to allow all Back Benchers to contribute to the debate, I am imposing a three-minute time limit that will be enforced. I call David Warburton to speak now.

--- Later in debate ---

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]]

It is a pleasure to share in this debate under your chairmanship, Mr Mundell. We go back a long way. I congratulate the hon. Member for Midlothian (Owen Thompson) on securing this important debate.

I wish to talk about a subject that I have mentioned before: insurance for live events. Even those who have been eligible for support will struggle in the recovery phase if they are unable actually to stage live music events. Many events cited by the Government as examples of cultural recovery fund support have been unable to go ahead this year due to a lack of insurance, including huge events such as the Glastonbury festival.

Why are they cancelling? Because they cannot get commercial covid insurance cover, or not at a competitive rate. Since January, I and others in all parties have been calling for the Government to put in place a Government-backed covid cancellation insurance solution. I have said it before, but such a scheme is not unprecedented. It has been done before with insurance for terrorism losses and—I point out yet again—the Government made a profit on that, which is worth remembering. I have said that repeatedly to Ministers and I hope that they will heed my call.

If we do not get events back up and running again, I fear that, in addition to losing good events in this country, we will erode something that is very important to Britain. Our culture and music are part of our soft power and, as we know, people come from all over the world to attend such events. Again, that is exactly why it would be helpful if insurance could be put in place.

Before I conclude, as Members know, I have the honour of being the joint chair of the gaps in support all-party parliamentary group. I want to put on the record my sincere thanks to my joint chairs and all the many Members who pulled together to form the APPG. I think it is the biggest in the history of the House of Commons. That shows just how important the issue that the hon. Member for Midlothian has brought to our attention today is.

[David Mundell (in the Chair)]

Thank you, Mr Stone. It has been a pleasure to chair you for once.

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[Catherine West (Hornsey and Wood Green) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Mr Mundell, and I thank the hon. Member for Midlothian (Owen Thompson) for securing the debate.

The increase in debt as a result of the coronavirus has been significant, and it has been particularly bad among groups of people who have fallen into the gaps of various furlough and other schemes. There seems to be an enormous lack of balance in who has been helped during the coronavirus pandemic. For example, if your name is David Cameron and you have a few handy phone numbers, you seem to have managed to do much better, by lobbying the Department for Business, Energy and Industrial Strategy eight times, whereas if you are a single parent living in Wood Green, you have been much more disproportionately affected by debt.

There are a number of options I believe the Government should look at to address some of the issues raised in this afternoon’s debate. First, they should review their decision, or impending decision, to take back the £20 per week top-up that they wisely gave to universal credit recipients earlier in the crisis. Now would be absolutely the wrong time. If we were to take a vote in this room, I am sure the answer would be that it was the wrong thing to do right now.

Secondly, the Government should take up the recommendations of the Excluded UK all-party parliamentary group, which the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) has already mentioned—he has very much led from the front on that. We have heard from a number of people, particularly in the creative sectors and in travel and aviation, about the uncertainty and the increase in rent. For example, in my constituency, a poor travel agent has been hit with a rent bill that has increased by 45% during this terrible time.

I would also like the Government to ensure that every single citizens advice bureau in the country is properly funded and that there are sufficient volunteers. I pay tribute to Daniel Blake, chief executive of my own CAB, and Lorna Reith, the chair. Other Members, too, will have excellent CABs.

Finally, the impact on many of the terrible ineligibility for schemes has led to an exponential growth in food banks and 1.3 million more children eligible for school meals—1,700 in my own local government area. We live for a future where there are no food banks. That rise shows the terrible situation for many who work in the informal economy and for small and medium-sized businesses. I look forward to the Minister’s speech.

[David Mundell (in the Chair)]

I call the SNP spokesman. Your time, Mr Grant, is trimmed to four minutes. We have been able to allow everyone to participate.

[Peter Grant (Glenrothes) (SNP)]

Thank you, Mr Mundell. I am pleased to sum up for the Scottish National party this evening. I commend my hon. Friend the Member for Midlothian (Owen Thompson) for securing the debate, and, as others have mentioned, for his tenacity in refusing to let the excluded become the forgotten. I commend everyone else who has contributed.

I summed up in a Petitions Committee debate on the same subject in December 2020. Most of what has been said today was said in December 2020. It was ignored then. It cannot continue to be ignored. What did not happen in December 2020 did not happen today either. Nobody has made a fulsome defence of the Government’s action, or inaction. In 2020, eight Conservative MPs spoke. None of them defended the Government. In 2020, we got platitudes and fake sympathy from the Minister who responded. I hope that that is one thing that will not be repeated here tonight.

There is a saying much loved by a certain type of business analyst, which is, “If you fail to plan, you are planning to fail.” That is exactly what the Government did in the 10 years between knowing that a serious potentially lethal viral pandemic was coming and it actually appearing. They planned for the public health implications. There was no planning at all as to what they would do in the almost inevitable situation where significant sections of the economy would have to be shut down to protect public health from the ravages of the virus.

It is safe to say that when the Prime Minister made his famous, or infamous, “Don’t go to the pub” speech, neither he nor the rest of the Government had any idea what they were going to do to protect those in the hospitality sector from the immediate and inevitable collapse of their businesses, or indeed, to help anybody else in any other sector. An indication of how hasty and ill-thought-out the Government’s response was is that one of the mainstays of that support, announced on 11 March 2020 —the business interruption loan scheme—had to be completely rewritten 23 days later.

It would be tempting to assume that that same chaotic, shambolic approach is the reason that so many self-employed people and small business owners got overlooked, but that would be wrong because it was not a mistake. It was not an oversight. It was not an accident. It was absolutely deliberate.

The Chancellor told the House in his 11 March Budget statement last year:

“There are millions of people working hard who are self-employed or in the gig economy. They will need our help too.”—[Official Report, 11 March 2020; Vol. 673, c. 280.]

He knew—the Government knew—that those people did not fit into the packages of support that had already been identified, but he went on to announce that the help they were getting was being allowed to apply for universal credit—a benefit that has been deliberately designed to be not enough to live on for any sustained period.

Let us look at one group of excluded workers: people who were persuaded in the past, by previous Governments, to set up their self-employed business as a limited company with themselves as the only shareholder and themselves as the only director, or perhaps with a close family member as another director. When the Government claimed in May 2020 that they had not had time to work out proper eligibility criteria to apply to that massive group of workers, that was tenuous, two months into the pandemic. It is beyond ludicrous to continue—to keep saying that 16 months in—but that is exactly the excuse the Government are using. The other excuse is that it is too hard to tell the difference between a shareholder of a company who actively works in the company and a shareholder whose only involvement is to take the dividends at the end of the year.

This is not difficult; it is not rocket science. It is easy. If only Governments and Government agencies were as willing to use data-matching technology to help people through a crisis as they are, quite rightly, to use it to catch benefit fraudsters and other crooks fleecing the finances of the public sector. That is all it needs; it needs only the will. If the Minister, as I expect, is going to defend the Government’s inaction, all I ask of him is that he do the excluded the courtesy of admitting to them that the reason the Government are doing nothing is that the Government do not care.

[David Mundell (in the Chair)]

I call the shadow Minister. Again, if you could stick to four minutes, that would be extremely helpful.

LGBT Conversion Therapy

David Mundell Excerpts

Monday 8th March 2021 Westminster Hall

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con) [V]]

I thank my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) for his thoughtful opening of the debate and his moving acknowledgment of survivors. I think it very important that we see the debate as an opportunity for a call for action from the Government.

The debate is obviously of moment, particularly for the quarter of a million people who signed the petition. It is an acknowledgment, as the national LGBT survey demonstrated, that this is going on in our country: 2% in the LGBT+ community had received such therapy and 5% had been offered it. We must treat the term “therapy” with the contempt it deserves, because we must be clear that this is not therapy; it is a pseudo-psychiatric 21st-century snake oil. There is nothing more pernicious than to deem someone sick and then to try to coerce them into treatment for something that is right at the core of who they are and who they love. We cannot tolerate it continuing.

There was a similar petition in the Scottish Parliament entitled “End Conversion Therapy”, which was dealt with last year by its Public Petitions Committee. Stonewall Scotland, Equality Network, Scottish Trans Alliance and LGBT Youth Scotland all supported the principles of that petition. In response, the Scottish Government—positively, from my perspective, because this is not always how they respond—said they wanted to work with the UK Government to bring about a ban. I want to encourage that working together on this issue so that we can deliver a ban that works across the United Kingdom and impacts on those in my own constituency in Scotland who might be put in this position. I also want to see the Scottish Government and the UK Government working on the GRA issue. As my hon. Friend the Member for Reigate (Crispin Blunt) mentioned in relation to trans issues, we need that to be dealt with—on a UK-wide basis, in my view.

While I am sure that the Government’s intentions are positive and the Prime Minister’s statement will be honoured, the Government have given the impression of being tardy, and now is the time to end that impression. As the chief executive of Stonewall, Nancy Kelley, said:

“The UK government must stop dragging its feet and make good on its promise to bring in a full legal ban, and put a stop to conversion therapy in the UK for good.”

I hope that the Minister, in her summing up, will give us clarity that that will happen and set out the timescale.

Covid-19: Access to and Acceptance of Cash

David Mundell Excerpts

Thursday 3rd December 2020 Westminster Hall

[David Mundell (in the Chair)]

I remind hon. Members that there have been some changes to normal practice to support the new call list system and ensure that social distancing can be respected. Before they use their microphones, Members should sanitise them using the cleaning materials provided, which they should dispose of as they leave the room. Members are asked to respect the one-way system around the room. They should speak only from the horseshoe, and they can speak only if they are on the call list. That applies even if debates are undersubscribed. Members cannot join the debate if they are not on the call list. I remind Members that they must arrive for the start of debates in Westminster Hall, but they are not expected to remain for the wind-ups.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I beg to move,

That this House has considered access to and acceptance of cash during the covid-19 outbreak.

It is a pleasure to serve under your chairmanship, Mr Mundell, however unexpectedly. I am a great believer in innovation in the Standing Orders, so it is good to see it happening in real time. I thank all hon. Members for attending this debate. I draw the House’s attention to my entry in the Register of Members’ Financial Interest. I have been a member of the LINK Consumer Council for all of three days, but I should make everyone aware of it none the less.

It is strange. A year ago, we were all debating who should appear on banknotes—which famous historical figure deserved the right to appear on our currency. Now, 12 months on, we are debating whether banknotes even have a future. I open my wallet and the moths fly out, not because I am stingy in any way but because I now use banknotes only to pay my window cleaner or my drycleaner.

Members will know that this topic is twofold, being about acceptance of cash and access to cash. The two are closely interlinked. Members have been arguing for some time about the preservation of ATMs to preserve access to cash, and I pay tribute to the hon. Member for North Ayrshire and Arran (Patricia Gibson), who has done a lot on that in the past. We are now seeing a growing trend towards as cashless society that affects all ATMs by reducing the consumer’s need for hard cash and making that infrastructure unviable. The key question becomes: what is the point of preserving access to cash if there is nowhere to spend it in the first place?

The trend has affected us all, but particularly the most elderly and vulnerable. Some may be nervous about using technology, or they may to struggle to remember a personal identification number or manage their personal finances. They may be among the 1.8 million people who are still unbanked and rely on a jam-jar approach to monitoring pots of money for bills, which cannot be done with a card. Recently published research from the consumer organisation Which? showed that two in five people reported being unable to pay with cash at a shop and did not have another payment method at the point of purchase. Indeed, two in 10 could not then buy medicine that they needed.

We see regional differences. London clearly leads the way: 75% of card usage there is now cashless, compared with 50% in my region of the north-west. I am also conscious that, as Members representing the highland fastnesses of the far north of Scotland can attest, there are many remote rural areas with very poor broadband, so it is not possible simply to install an iZettle—a little handheld device that permits cashless transactions.

Even in the three years up to lockdown, there was a drop of 20% to 30% in ATM withdrawals. Of course, when lockdown hit, that usage fell off a cliff. It has now recovered to some three quarters of what it was, but I very much suspect that the remaining quarter is unlikely to come back. We are turning cashless almost without noticing it, and certainly without discussing it. The trend is accelerating. LINK predicts that as few as one in 30 transactions will involve cash within the next five years or so.

There are many regulators in this field. One of them, the Payment Systems Regulator, has delayed its consumer tracker due to covid, even though it is more needed than ever. The PSR is rightly now focusing on access based on deprivation, rather than just on geographical area. We have indeed seen, just as in my constituency, a much sharper reduction in free-to-use ATMs in the more deprived areas.

A key noticeable feature of the initial lockdown was the sudden drop-off in the number of shops accepting cash. I saw that in my constituency. A fruit and veg shop suddenly went cashless—something that never would have occurred to me as likely to happen. Part of the trend of shops stopping taking cash was the fear of the virus remaining on banknote and coin surfaces. In the past week, I have noticed that the Bank of England has sought to clear up that myth, and I hope that shop workers and customers will start to feel more confident that using banknotes and cash does not put them at greater risk of contracting the virus.

Which? said that the reduction is also due to the underlying challenge of handling cash. Perhaps it means driving further to deposit a day’s takings at the bank, given the number of bank closures, or queuing for up to half an hour to make a deposit in a post office, which means that the working day is extended. Each time they have to go, the unit cost goes up, as fewer use cash. That drives more businesses cashless for simple economic reasons.

We have seen innovation from ATM providers and FinTech. LINK continues to have the role of ensuring that protected ATMs are replaced when needed and subsidising low-volume ATMs. It pioneered other approaches such as a community right to request an ATM as well as a range of schemes focused on promoting local cash recycling and more use of cashback without purchase in shops. However, even if the cashback without purchase pilots prove successful, it still requires the Government to renew the regulations concerning what is called PSR 2 for them to continue. That is critical because the pilots end soon. Will the Minister confirm that the regulations will be tabled in due time so that the industry can make sure it continues that good work? Will he also extend them to include deposits, so that local businesses have more options for where to take their cash at the end of the working day? In case he thinks this is a rather obscure point, he might wish to be aware that there is one pilot at a SPAR in Castle Street, Hereford, which is one of the trialled pilots. Perhaps he is more likely to be found in the Waitrose by the football ground rather than in SPAR on Castle Street, but he might wish to visit to see how it is working in practice.

I know the Government have promised an access to cash Bill. The Treasury is starting a review of access to cash as well, but can the Minister comment on the timing of the Bill? I am very concerned because we need a Bill sooner rather than later. The changes are happening now. Cash is disappearing now. Even if we do not get the Bill soon, I hope that some of the structural changes needed in the sector that do not require legislation can be accelerated by the Treasury.

The Government have set up so many institutional bodies. The Joint Authorities Cash Strategy is a key one, which is trying to reduce the cost of the hidden cash infrastructure that distributes notes and coins by consolidation and removes duplication. We do no talk about this often enough; we just look at what the consumer does, not at what happens behind the cash machine or cash register, which is just as important. In addition, the Payment Services Regulator now has a steering group for consumer working groups, each meeting weekly and coming up with solutions to immediate and medium-term problems. One might argue that there is far too much going on. The National Audit Office report, “The production and distribution of cash”, published in September, made that point and highlighted five separate bodies with an oversight role in cash infrastructure. This surely needs rationalising to make it more effective. Many bodies recommend that the Financial Conduct Authority takes on responsibility for protecting access to cash.

Serious thought is being given to the public utility model for cash infrastructure by another group that the Government set up, the Wholesale Distribution Steering Group. I would support that model, as the minutes from the steering group’s meeting on 18 November stated,

“without some action being taken the current wholesale cash distribution system would not remain efficient or effective against the backdrop of declining cash volumes.”

That puts it in a nutshell. We must not allow vested commercial interests to veto much-needed reform, particularly if all we end up discussing is interbank rates, so will the Government accelerate the proposal for a public utility model so that we can reduce the £5 billion cost of the hidden wiring that makes up the infrastructure?

We also need a long-term solution. We cannot pretend that we are not heading for an almost wholly cashless society at some point in the future. The question surely is: how do we get there? I very much hope the Government’s access to cash Bill will include a commitment to set up a body a bit like Digital UK, which managed the transition from analogue to digital TV. It is perfectly possible to create a guiding hand that knits together all the different interest groups, working with both the infrastructure providers and the charities that work on debt advice or support the elderly. They could manage that transition and make sure that those at greatest risk of being marginalised are helped through the process. I confess that is not my idea. I cannot claim the credit. That goes to Natalie Ceeney, who chaired the initial access to cash review.

I would also like the Government to probe into whether we should enshrine a legal right to pay cash for bills up to £100, as Denmark has done. It could perhaps be time limited until such point as the transition is completed. A more radical idea still might be a short-term legal requirement for shops to continue to accept cash as a primary way to protect both the acceptance of cash and by extension the cash infrastructure, including ATMs. That might be controversial if unit costs continue to increase for businesses, but I want to know the Minister’s views before I start planning my amendments to the Bill when it finally appears.

The sector is innovating, even though it is hamstrung by competing commercial pressures and some arcane internal debates. The Government have at least identified the problem and have raised the sense of urgency, and not just because I have started pestering the Economic Secretary to the Treasury whenever I pass him on the street. He now crosses the road very quickly when he sees me coming, and I do not blame him! I still think we need to have a wider national conversation and a much greater sense of urgency about how we manage the process. The transition is happening as we speak and not many people are noticing it. There will rapidly come a time when people ask, “Why did we not think about this more clearly at the time it was happening?” As the deputy chairman of the Swedish Riksbank, Cecilia Skingsley, said:

“If we don’t do anything we are looking at a future where money is spontaneously privatised.”

I do not think any of us in this House want to see that. We all have constituents who fall into the potentially vulnerable categories. We want to make sure that their interests are cared for as technology forges ahead. The Government have made a good start, but they need to follow through and much more speedily than is currently the case.

I look forward to hearing what other hon. Members have to say.

[David Mundell (in the Chair)]

Thank you for that excellent start to the debate, Mr Maynard. I call Yvonne Fovargue to contribute next.

--- Later in debate ---

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Mr Mundell, which I think is a first in the 21 years that we have known each other.

I will dwell briefly on cash machines, because excellent reference has already been made by the two previous speakers. I commend the hon. Members for Blackpool North and Cleveleys (Paul Maynard) and for Makerfield (Yvonne Fovargue) for two very fine speeches, which will mean a lot to my constituents in the far north of Scotland.

There is a village called Durness in north-west Sutherland, which is the northernmost and westernmost inhabited community on the British mainland. Every year, they have a tremendous Highland games and tourists come from far and wide. I remember my predecessor bar one, Robert Maclennan, the late Lord Maclennan of Rogart, being chieftain of the games some years ago, resplendent in kilt and everything else. He greeted me very warmly and said he had had six glasses of whisky. He was in extremely good form.

There was a cash machine in Durness, run by the Bank of Ireland, part of Robbie and Fiona Mackay’s shop. They used to tell me that the amount of money that came out of that machine the day before the games and during the games was absolutely staggering—tens of thousands of pounds. That was, of course, then spent on whisky or on whatever else at the highland games and it went straight back into the local economy. Then the machine was taken away. As Robbie Mackay said, “They can get cashback in the shop, but I can’t stay open until the wee small hours; I can’t be open at 6 in the morning.” That was the problem and it became a huge cause célèbre in that part of Sutherland.At the end of the day we did get a cash machine back in, but as the hon. Member for Makerfield said, getting them back again once they have been closed is a near-impossible task. I can tell Members that it is: I have the T-shirt. For every one we win, we lose a lot of others.



The second anecdote—just to colour in the cash machine issue—is that some years ago, maybe even 10 years ago, there were huge gales in the north of Scotland and the electricity went out—not for a few hours, not for a day, but for three, four or even five days in some communities in my present constituency. That meant, of course, that the cash machine did not work, and neither did contactless, so it is worth remembering that the present electronic regime is vulnerable to an electricity failure.

That is as much as I want to say about cash machines, except that they absolutely underpin my constituency. Of course we can withdraw cash from bank branches, but as I have said an awful lot of times during my three years in this place, we now only have one bank branch in the entire county of Sutherland. That is 2,028 square miles; it is a vast county, with one bank branch, in Golspie. That means that people have to make a 150-mile round trip to go to a bank branch, which is causing huge difficulties for my constituents.

As all colleagues here today know—I have mentioned this many times in this House—it seems as if there is a sickening liturgy of closures, one after the other, which we are unable to do anything about. Of course I am told, “You can use the post office.” That is not the silver bullet, because—as has already been alluded to—many is the post office that has already shut, or is shutting, in the relevant town, and the distances to get to the nearest post office are impossible. In no way do I denigrate what the Post Office does: it is a splendid institution, dating from the 19th century, and it is something that we can be very proud of as a British innovation.

I apologise for repeating myself, but one thing that I and others have been advocating is a joint banking hub approach, whereby the clearing banks work together to form a joint hub that would be owned in Scotland by the main clearing banks. That would mean a human face or faces behind the counter, who can advise. I bank electronically—I do it through my mobile—but I got a fright quite recently when I saw a debit coming off my account that I did not know anything about, and it was actually a banking fraud. Now, by dialling various numbers and taking a long time over it I got to the bottom of it, but had I been older than I am, or had I been a vulnerable person, that would have been very frightening. What better than to be able to go into a bank branch and ask, “What is happening here?” and be told, “Ah, this is a fraud we know about. We will kill it right now and get the money returned to you”?

I am not having a go at the Government, because the Government have actually been helpful. Before the pandemic, I had a constructive meeting with the Economic Secretary to the Treasury, and I was very grateful to him for that. He thought that there was possibly some mileage in the Government looking at the concept of a jointly owned banking hub, and indeed, on the business front, that concept has already been established—not for the north of Scotland, but nearer London, I think. Before the covid outbreak, I had hoped that I could have a look at it and see how it worked, and whether we could apply the same principle to the clearing bank idea, tweaking it suitably.

The other thing about having a human face behind a counter, or in a building that really exists and is reasonably accessible to people, is the issue of depositing money. We can take money out of a cash machine, but we cannot stick it back through the slot, and during the covid pandemic I have heard from businesses that, by the very nature of what they do, have had to travel a considerable distance to bank their weekly takings. That, I suggest, is not terribly safe, not only because of the security risk—a person travelling with that amount of money on them, in their car—but, sadly, because of the likelihood of transmitting the disease. We can learn lessons from the pandemic about this.

When it comes to the idea of a hub, where there is a will, there is a way. It could be done, and what I try to say to the banks of Scotland is that it would benefit them in so many ways. I am digressing from taking cash out of machines, so I will be very brief, but I have constituents who tell me that they have a brilliant idea to start a little business, but that whereas their father or grandfather would have talked through the sums with the bank manager and the bank would have supported them to the tune of, perhaps, £20,000, my constituents cannot do that because it is not so easy now. They may have to travel somewhere far away, which, because of covid, is not so good.

I started with a light-hearted point about the Durness highland games; I conclude on the splendid galas that we have in our highlands. Wick gala is famous, and it is excellent, with great entertainment. There are lots of different acts on the backs of lorries. I remember, on one lorry, an excellent take-off of my immediate predecessor Viscount Thurso, which was very humorous; indeed, his lordship enjoyed it enormously. The way to contribute to the Wick gala is to throw money at the floats, which is caught in little nets. A lot of things that are good for civic society involve cash being given. In my hometown of Tain, people go around with buckets which money is thrown into. That is how it is done; it cannot be done with a card or contactless.

With that light-hearted point, I congratulate the hon. Member for Blackpool North and Cleveleys on securing the debate. It is super to see a constructive debate such as this taking place. I look forward with great interest to the Minister’s reply.

[David Mundell (in the Chair)]

Thank you, Mr Stone, for that—as ever—entertaining tour of your constituency. I will call Sarah Owen to speak next, and in the course of her contribution the Chair will transition to Yvonne Fovargue.

--- Later in debate ---

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

It is a real pleasure to serve under your unexpected chairmanship, Ms Fovargue. I am grateful to my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) not only for securing time in Westminster Hall to debate access to cash and acceptance of cash during the covid-19 pandemic, but for his continuing work on this subject, as highlighted in his very thoughtful opening speech. I am also grateful to the other participants so far—including you, Ms Fovargue—for raising a series of important points, some of which I will repeat.

This debate is urgent, because I fear that, accelerated by covid-19, we are sleepwalking quickly to a cashless society in a totally unmanaged and unprepared way, with potentially disastrous consequences for many of our constituents. I know there will be people who advocate the benefits of a cashless society, but even if that is the case, we must not proceed in this unplanned and ad hoc way. We know from research that some 17% of adults in the UK—around 8 million—would struggle in a cashless society, and those struggling the most would be the elderly, the vulnerable, the economically excluded and those in rural communities such as my Dumfriesshire, Clydesdale and Tweeddale constituency.

Shockingly, the National Audit Office’s recent report on cash found a fragmented system of oversight, with the Financial Conduct Authority regulating banks and the Payment Systems Regulator regulating payment systems identified by the Treasury. Coherence and co-ordination is urgently needed in this regard, along with clear, robust messaging from the Government on the importance of being able to use cash, at least for the time being. In my view, the Government’s promised legislation should not just address access to cash, but make the Financial Conduct Authority responsible for regulating a well-functioning retail cash system.

When I have previously raised this issue, the ability to access cash and the cost of doing so was the primary concern, along with the need for small businesses, charities and local organisations of the type that the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned, to be able to deposit cash. Now, however, the immediate focus has to be on cash acceptance. It is pointless to access cash if people cannot use it, yet cash is increasingly refused as a means of exchange. The Bank of England noted in its quarterly bulletin that 42% of people had recently visited a store that did not accept cash. More worryingly, Which?, to which my hon. Friend the Member for Blackpool North and Cleveleys referred, conducted a survey that found that four in 10 of those who had experienced difficulties paying with cash had been left empty-handed when trying to buy groceries, and almost two in 10 had been unable to buy medicine. Indeed, I learned only yesterday of another pharmacy that has gone cashless.

Industry-collated data suggests a 71% decline in cash use between early March and mid-April of this year. Conversely, my experience is of the importance of cash to people who have relied on it during the pandemic. Cash has been the means by which local communities have supported themselves, with neighbours, friends and family buying essentials for one another. Short of handing over one’s PIN and bank card, cash was the only option for many of those who needed others to help them when faced with domestic emergencies, given that such people were mostly older or vulnerable and were certainly not users of apps, credit cards or digital banking services. Indeed, many are part of the so-called unbanked community.

As others have touched on, there is no doubt that part of the issue is the false perception that cash has not been safe to use during the pandemic. In my view, some have seized on that perception as an excuse to go cashless for their own purposes. In any event, it is just not true: as far back as April, the Bank for International Settlements advised that the risk of transmitting covid-19 via banknotes was low when compared with credit card terminals or pin pads. That view is shared by the Bank of England, which found that,

“the survival of virus on banknotes is no greater—indeed appears potentially less—than on reference surfaces representative of the many surfaces that people may come into contact with in their routine life.”

Cash is safer still if users follow the routine guidance on washing their hands regularly and on social distancing.

The Government now have a major role to play in making it absolutely clear that people should be able to use cash in routine transactions. If that is not possible on a voluntary basis among retailers and other service providers, legislation should be considered—at least for a fixed period—to support those who are least able to manage without cash in transitioning to a cashless economy. My hon. Friend the Member for Blackpool North and Cleveleys drew a useful comparison with the transition to digital television.

Amid the pushback on the use of cash, accessing and depositing cash has become increasingly difficult, with bank branch closures and the decline of free-to-use cash machines. Since 2015 there has been a 17% reduction in the number of free-to-use cash machines, and since 2010, 39% of the bank and building society branch network has closed. That has been acutely felt by local communities in my constituency, which have seen seven Royal Bank of Scotland branch closures in recent years, as well as the closure of the West Linton branch of the Bank of Scotland. Covid-19 has only added to the impetus of that trend: three other local cash machines have been lost, and the TSB in Peebles is scheduled to be shut. In your speech, Ms Fovargue, you made an important point about post offices, as did other hon. Members. Post offices in my constituency have been closed the next day because the postmaster was ill, meaning that people could not gain access to the post office.

[Jamie Stone]

The right hon. Gentleman is making an excellent contribution. Does he agree that the closure of local bank branches and post offices is all part of the downward spiral of Scottish high streets?

[David Mundell]

Indeed. The challenge of the high street is a considerable one.

Although our local post offices do a good and worthwhile job where they are still in the community, they are not a silver bullet. It is sometimes suggested that everything will be sorted out by the post office. The challenge is not only in having post offices in every community in the first place, but in the considerable issues that post offices face in providing those services and, very often, operating a retail outlet. That is why we need the joined-up approach to the whole cash system, as I have said.

As my hon. Friend the Member for Blackpool North and Cleveleys mentioned, there has been a rise in the number of cash machines that charge for use. Most cash withdrawals from machines are relatively small, so the charges mean that users effectively face a 10% to 30% tax on each transaction. Generic figures on the number of free-to-use cash machines mask the scarcity of such machines in rural and deprived areas.

When I last counted, there were fewer free-to-use cash machines in the almost 1,700 square miles of my Dumfriesshire, Clydesdale and Tweeddale constituency than can be found on or just off Victoria Street, a few moments from here. That imbalance is plain wrong and the industry must correct that. I welcome the fact that the banks, LINK and the card operators, which have come forward with innovative proposals about the interchange rate that applies to cash transactions, are all contributing to the thoughtful work that the Financial Conduct Authority and Payment Systems Regulator are undertaking, about which my hon. Friend the Member for Blackpool North and Cleveleys spoke in detail.

I was pleased to have the opportunity to discuss these issues recently with the Economic Secretary to the Treasury. I welcome his commitment to legislation and other initiatives on access to cash, but, as I have said, I hope they will go beyond access to cash and cover the entire cash system and responsibility for it. That legislation is needed now, along with the Government’s robust advocacy of our ability to use cash. Without action, our cash system is in danger of collapsing, leaving the elderly and most vulnerable to pay the price. I hope that the Minister can promise that action today as a matter of urgency.