Post Office Mediation Scheme
Debate between Lord Beamish and Jo Swinson(10 years ago)
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Jo Swinson
My right hon. Friend is right to recognise that the accusation is a serious one—if true, it would be incredibly serious. It is difficult to know whether that is the case, which is why full investigation is needed. The hon. Member for North Durham made a clear challenge, and a fair one, about ensuring that we get some action and resolution on the issue. The point that I push back on is that many of the cases are incredibly complex, understandably so, because they are dealing with systems and many transactions—
Jo Swinson
In order to do something, what is required is independent investigation that is done thoroughly and forensically—
High Cost Credit Bill
Debate between Lord Beamish and Jo Swinson
Jo Swinson
I know exactly who my hon. Friend is referring to. I would merely point out that they were very selective in their use of statistics. For example, they ignored the fact that the payday lending market has doubled in recent years. The fact that there was a frank exchange of views in no way contradicts what I said about our delivering a clear message to the payday lenders about what they have to do to get their house in order.
My hon. Friend the Member for East Hampshire (Damian Hinds) spoke well about how adverts pretend that such loans will solve problems that they will not solve. The adverts suggest that a payday loan is the answer to problems such as not having enough money towards the end of the month. If people find themselves in that position, the answer is not to take out a payday loan, but to get some good financial and debt advice.
When legislating on advertising, the evidence base for what should be brought in and what will work needs to be strong. The FCA will have powers to ban misleading financial promotions and to create rules on advertising payday loans. At the press Q and A after the summit, the chief executive of the FCA made it very clear that he would consider all sorts of rules that could be made with regard to advertising, including on the timing of adverts and the content that needs to be included. The FCA is very clear that it is looking at that issue.
It is important to proceed on the basis of research and evidence. BIS has commissioned Ipsos MORI to conduct qualitative research into the impact of advertising on consumer behaviour because we want to know what changes would be most effective in helping consumers. It would be easy to pull something out of the air and say, “This is what we should do on advertising,” but we want to know what works.
My hon. Friend the Member for East Hampshire talked about the wallpaper of life: the little annotations that we hear and see in adverts all the time, such as “terms and conditions apply” and “shares may go down as well as up”. Do we actually respond to all those things or would other things be more effective? The research will look at what health warnings or wealth warnings might work on such adverts, whether signposting debt advice might be more effective, and what is the best way of simply explaining the cost to people. There is a range of reasons why APR is not the most relevant figure in the context of payday and short-term credit advertising, not least of which is that many people do not understand what APR is. Is there an easier way to get that information to the consumers? That research will provide evidence to inform the FCA as it develops its rule book. We will publish the findings in the autumn.
The next issue is roll-overs. The hon. Member for West Ham (Lyn Brown), who is no longer in her place, made an interesting intervention in response to my hon. Friend the Member for Shipley. She was right to say that people are often not lending £150 at a high interest rate for just two weeks. If it was just for—[Interruption.] I do apologise. The hon. Lady is in her place but I could not quite see her behind the Table. She was right to highlight this issue. If somebody is lending money over a very short period at a high interest rate that basically covers the administration cost of setting up the loan arrangement, that is not necessarily problematic. The problem arises when that short-term loan is no longer short term, but becomes medium or long term because it is rolled over from one month to the next. That is when the APR is much more relevant, because people are taking out a much longer-term form of credit. Roll-overs are therefore problematic. In some cases, even one roll-over is too many.
Mr Kevan Jones
Why are the Government and the hon. Lady opposed to legislation such as that common in Canada, for example, which bans roll-overs in some places or limits the length of a loan?
Jo Swinson
I am not opposed to regulation or rules on that, but the issue is whether it is best for the Financial Conduct Authority or the House to put the rules in place. We have given responsibility for regulation to an independent agency that has tough powers and the ability and expertise to look at specific evidence on what will be most effective, and that is where rules will best be made. The FCA has said it will look carefully at what needs to be included in the rules on things such as roll-overs, and the voluntary code to which lenders have signed up states that they too believe that some restrictions on roll-overs are appropriate within the industry.
Jo Swinson
That intervention hardly merits a response. I am here because I am the Minister responsible for issues that affect consumers and consumer credit. We have significant problems in the payday lending industry, and my priority is finding the best way to solve them. I do not believe that the House prescribing these measures is necessarily better than it being done by the FCA. The FCA can put rules in place and, importantly, can change them whenever the market changes. We know that the market is fluid and that it changes regularly. If rules are put in place and practices change to get round them, the FCA can act swiftly to ensure that loopholes and gaps are plugged. That is a better way of protecting consumers, although the hon. Member for North Durham (Mr Jones) is entitled to disagree.
Post Office - Horizon System
Debate between Lord Beamish and Jo Swinson
Jo Swinson
It is to the Post Office’s credit that it has commissioned this independent review, which has been transparent and accountable, as my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) also said. It is easy for organisations to say there is not a problem and to try to sweep these things under the carpet, but Post Office Ltd decided to be open about it and to ensure that the report was published. In fact, its newsletter to all branches contained an article encouraging anyone who had difficulties or queries they wanted to raise to ensure they were put into the Second Sight review.
The Post Office has taken significant steps to ensure that there is transparency and accountability and that people’s concerns are taken forward. Clearly, sometimes these issues take time, and of course there are lessons to be learned. Improvements will be made to ensure that when queries are raised, they can be investigated more thoroughly, but again I highlight the context: we are dealing with a system that processes billions of transactions, so it is very complicated and it cannot be expected that nothing will ever go wrong; what is important is how the organisation responds when things do go wrong.
Mr Kevan Jones (North Durham) (Lab)
Being a Minister allows the hon. Lady not only to ask questions but to right wrongs. To dismiss cases such as that affecting a constituent of mine, Mr Tom Brown, as minuscule does not change the fact that he has lost his livelihood, his wife has died, his name has been dragged through the local community and he is stilling awaiting an outcome from the Post Office. He was arrested by the police, but they did not take the case forward; the Post Office did. His good name is now being questioned, he has had to sell his house and is still waiting for the Post Office to produce the evidence. I am sorry, but the Minister’s statement has done none of the things she could have done to put right some of these wrongs.
Jo Swinson
I appreciate the situation that the hon. Gentleman’s constituent finds himself in—it is important that he is speaking up for him—and I understand that this has had a massive impact on those involved. When I referred to “minuscule”, I meant the number of transactions queried out of the overall number of 45 billion. I do not know the details of the individual case, so I hope he will appreciate that it is therefore difficult for me to comment. What is important is that we have an independent procedure to get the answers that people such as his constituent are looking for, and everyone involved must have confidence in that procedure. I know that there have been meetings of MPs and that the JFSA is involved; getting those answers is important, but it is also important to stress what the report shows, rather than to suggest that it contains things that it does not.
Business of the House
Debate between Lord Beamish and Jo Swinson(14 years, 6 months ago)
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Mr Jones
No. As one who can remember all-night sittings, I have to say that they were conducive neither to the health of individual Members nor to the scrutiny of legislation. Let us be honest, however: the coalition has hit the ground running with reviews, commissions and study groups. The programme for the period between now and the summer recess is not exactly packed with legislation that would take up time. Unless all the various reviews, study groups and commissions are to report instantaneously, we should find more time in which to discuss the important changes that we are discussing, which will have an effect on the way in which the House operates.
Jo Swinson (East Dunbartonshire) (LD)
Notwithstanding the genuine issues raised by the hon. Member for Dwyfor Meirionnydd (Mr Llwyd) in a point of order, which have to be discussed, would the hon. Member for North Durham (Mr Jones) at least concede that many of the motions on today’s Order Paper merely put into effect what the House has already discussed at length in the previous Parliament, on 4 March and 18 March, in respect of the Wright Committee?
Mr Jones
I am sorry that the hon. Lady wants to disfranchise up to a third of this House, who were not here in the previous Parliament. It is important that those Members be allowed to look at the proposed reforms and have their say on them. I know that, along with her colleagues, she has signed up to the Conservative party. I thought that the Liberals were not in favour of an authoritarian approach. We see the two sides of the Liberal party.
It is important that we have debates. I served for seven and a half years on a Select Committee and am a keen supporter of the scrutiny role that Select Committees play. There are issues about, for example, the size of such Committees and the representation of the minor parties. If this is steamrollered through on a Conservative-Liberal Democrat guillotine, many people in both Scotland and Wales will rightly be annoyed.
The Parliamentary Secretary and the Leader of the House have made a very quick conversion on a short road to Damascus. In the previous Parliament, when we talked about modernisation, the Parliamentary Secretary said:
“At the moment, there is a nod and a wink between the usual channels, and then a programme motion is plonked before the House, which can take it or leave it—the answer is that we take it, because there is a Government majority in favour of the programme motion. That is not a good enough way of doing business, and it does not do justice to hon. Members.”—[Official Report, 1 November 2006; Vol. 451, c. 335.]
In the new coalition Government and in the new spirit of co-operation, or conversion, that has taken place in the past few weeks, the Parliamentary Secretary has clearly changed his mind on programme motions. It is bad enough to have programme motions, which he used to argue vociferously against in the previous Parliament, for legislation that is being introduced, but to have them for something that affects individual Members of the House is wrong.