Independent Debt Advice

Lord Austin of Dudley Excerpts

Tuesday 8th February 2011 Westminster Hall

[Lorely Burt (Solihull) (LD)]

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing this very important debate. To some extent, it follows on from the Opposition-day debate that we had in the main Chamber last week.

Obviously, everyone in this room wants to see the same thing. We want to see a fair and open system of financial support for people who get themselves into financial difficulty. I know personally that the National Association of Citizens Advice Bureaux is a wonderful organisation. It took on the role of providing specialist debt management advice and it has done a really good job, so I share the hon. Lady’s concern regarding the financial inclusion fund.

Local authority cuts will mean that the citizens advice bureaux will not have as much support as they have had. That is having a drastic effect in my own region, the west midlands, where all five bureaux are destined to be closed. I hope very much that the Minister will be able to intervene in some way to ensure that that vital service for the Birmingham area is maintained. In Solihull, we have faced cuts to our citizens advice bureaux before and we have managed to survive them.

[Ian Austin (Dudley North) (Lab)]

I am grateful to the hon. Lady for giving way, but I must say that it is not good enough for Liberal Democrat MPs to come along to these debates and complain about what this Government are doing while they are supporting them. What has she said to Ministers? Has she threatened not to support the Government’s proposals? Has she told them that if these cuts go ahead she will not vote for something else that they are proposing? What have she and her colleagues done to try to prevent these cuts from happening?

[Lorely Burt]

I am glad that the hon. Gentleman made that intervention, because his Government caused cuts to be made to citizens advice bureaux. It is how the Government manage that is important. He asks what I have done and I will tell him. I have worked quite considerably on the issue of debt. In fact, I advise the Government and I am putting in my help and advice, as much as I can, to Government. That is what Governments do and that is what responsible coalition Governments do. We can make our points independently as Liberal Democrats, but we support what the Government are doing because of the financial situation that the hon. Gentleman’s Government left us in and everyone has to bear a share of the pain.

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[Catherine McKinnell]

I strongly agree; that is precisely the point that I want to make today. With no news of any funding beyond March, the service in Newcastle is winding down, and so are bureaux right across Tyne and Wear. The situation is deeply worrying because of the personal insolvency figures and also because people, particularly in places such as the north-east where more than 50% of the population is employed in the public sector, will find themselves in even more worrying financial circumstances.

[Ian Austin]

Areas such as my hon. Friend’s constituency and mine, which have been hardest hit by the recession and are taking the longest to recover, will be most affected by the cut. In the west midlands, 62 staff are employed as a result of the financial inclusion fund, including five at the CAB in Dudley, and the staff there told me that it is hard-pressed families, the most vulnerable and people with learning difficulties who have got themselves into debt, who rely most heavily on the services. They also told me that their clients will have absolutely nowhere to go if the funding provided by the financial inclusion fund is withdrawn.

[Catherine McKinnell]

I thank my hon. Friend for reiterating the point that I am trying to make, which is that the cut is ill thought through and ill-timed for places facing an uncertain financial future. Unemployment in the north-east is rising, youth unemployment is at a record high and one in three young people in my constituency are out of work, compared with one in five nationally. At the same time, public sector workers face redundancy, the VAT rise and increasing fuel and energy prices. People will only get into more financial difficulty. It is shocking that at a time when increased demand on personal debt advice services is inevitable, funding for those services should be cut. It is also of concern that we are likely to lose highly skilled and trained staff who have built up a wealth of knowledge and expertise in helping people. Eight staff members in Newcastle are being made redundant, which is deeply worrying and shocking.

As I am sure the Minister is aware, in February 2010, the National Audit Office concluded that the face-to-face debt advice funded by the financial inclusion fund delivered good value for money. Indeed, the NAO found that the financial inclusion fund project was helping more people at slightly less cost per person than originally planned, and that the advice given was well regarded by those receiving it. That has certainly been the case in Newcastle, where 90% of clients who filled out a feedback form said that they would recommend the citizens advice bureau debt advice service to somebody with debt.

I recently saw at first hand the excellent advice services provided by the CAB during a special advice service day at a local community centre in the west end of Newcastle, the area that suffers the highest levels of deprivation and personal bankruptcy. The CAB brought together a series of advice services under one roof and took them out into the communities suffering the most. It was an impressive and productive day, and I know that it helped an awful lot of people in my constituency.

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[Andrew Percy]

Well, if the hon. Gentleman does not want to do that for his constituents, that is his choice. I certainly intend to do it for mine.

[Ian Austin]

Of course all Members of Parliament ensure that our staff can provide advice to constituents, but surely the best way to help the most vulnerable people who rely on those services is to ensure that those services are not cut. Government Members have come here to go on about how serious the problems are and how valuable the services are that CAB provide, so why are they queuing up to walk through the Lobby to support a Budget that will remove that assistance?

[Andrew Percy]

That proves again that Labour Members cannot understand what they did to this country. The reality of the situation is that whoever might have been in Government now—

[Ian Austin]

Will the hon. Gentleman give way?

[Andrew Percy]

No, let me finish. If the hon. Gentleman is going to make a point, he should at least have the courtesy to listen to the response. He was part of a Government that ran up massive debts that the coalition Government must repay. Tough decisions have been made, but even when we are not necessarily happy with some of those decisions, our job as coalition Members is to come here and make it clear what we think our constituents deserve. In saying what I have, that is exactly what I have tried to do. I am trying to support exactly the point that Opposition Members have been making, which is that we need face-to-face debt advice.

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[Andrew Percy]

We had an interesting debate about debt in the main Chamber last week. I was sorry that we could not get to the point where everybody was in agreement, even though I think that everyone was—the procedures and processes of this strange place meant that we ended up with a Division that we should not have had. We should certainly be looking at the way in which we manage people who want to put us into debt.

The issue has three parts. First, we need to deal with the companies that make money out of debt. They will always exist and, as I have said, that is part of life. Secondly, we need to deal with the sort of debt advice available to people who get themselves in trouble. Thirdly, we have to look at the provision for ensuring that people do not get into such a position in the first place. That is why the all-party parliamentary group on financial education for young people, which is chaired by my hon. Friend the Member for North Swindon, is so important. Only yesterday, I was at Goole high school and spoke to its deputy head about the delivery of financial education in schools and how he thinks we could roll it out nationally. That is certainly something in which I plan to play a big role in the all-party group, which he was so key in establishing.

In conclusion, it is not hypocrisy for us to say that people involved in citizens advice bureaux—

[Ian Austin]

It is.

[Andrew Percy]

I must say that, sometimes, the debate in this place is worse than when I taught year 1 last year—the children gave more sensible responses. I have tried to make an important point on behalf of my constituents and have ended up being heckled in a childish way on an issue that is so important to people outside this place.

The reason that I have taken part in this debate is to say that the work that my local debt advisers have been doing through the financial inclusion fund is incredibly important. I know that the Minister shares my huge concern about the issue, so how exactly will the system that we propose to implement work, and what is his response to the comments made by Members on both sides of the Chamber about the face-to-face element? We need to know more.

As I said at the beginning—I will end where I began—this is such an important issue. Managing debt is a part of life now and, unfortunately, people get themselves into debt simply by making bad choices, which we have all made in our lives. We have to make sure that the support available to them is appropriate. I end with that plea. I am less concerned about the mechanism and more concerned about what is actually delivered to my constituents. In my view, that requires some sort of face-to-face interaction, whoever that interaction is with.

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[Helen Goodman]

My hon. Friend has made an extremely well-informed point and demonstrates to us all the complexity of this area and the significance of losing that kind of advice. Of course, the one group of people providing more advice are the loan sharks and the independent debt advisers, who are going round my constituency putting cards through letter boxes, saying, “Come to us”. If people go to them, they will be directed to precisely the people who will put them into a worse situation.

At the same time that that is happening, the Government are cutting the growth fund, which is the money that the Labour Government put into support for credit unions—another place where people can get low-cost finance and have a chat with somebody about how to manage their money.

[Ian Austin]

This is not just about CABs or other advice agencies. The benefits advice shop in Dudley does really important work to get local people the help they need if they have been made redundant or face losing their home, and helps many pensioners receive the benefits to which they are entitled. Is my hon. Friend aware that it is under threat from the local authority as a direct result of the Government’s cuts to local council spending? Does she agree that it is complete nonsense to cut such a service? It costs £300,000 to run but it brings in £2 million to local people, £1.5 million of which is spent in the local economy supporting local businesses.

[Helen Goodman]

My hon. Friend is absolutely right. Although Dudley is very different from Teesdale, which is another part of my constituency, the situation there is similar. The Teesdale CAB also lost its grant and will have to cut the jobs of two people. Last year, it dealt with 220 cases and a total of £2.7 million of indebtedness.

The third CAB in my constituency is in Sedgefield. It too lost its financial inclusion fund grant of £150,000. Last year, 41% of its work was debt-related. All the debt workers in the Spennymoor CAB will be made redundant in April. The CAB social policy officer in Sedgefield, Martin Jones, said:

“The effect of ending the FIF scheme…will be catastrophic. The level of services that we can provide to our clients will be totally decimated as the CAB will lose over half of our debt team. And all this at a time when unemployment and inflation are rising and putting increasing stress on our clients, many of whom are the most vulnerable in society”.

I confirm that that is correct. On Friday, I learned that in just one part of my constituency, housing benefit cuts will mean that people will have to find another £1 million from their own pockets to pay their rents.

The Minister does not seem to understand that it is all very well to talk about the big society, but the vision of the big society is collapsing. In these communities, where incomes fall and businesses do not do very well due to the Government’s irresponsible policies, CABs will not be able to raise alternative funds to replace Government grants. Furthermore, this is a policy of total financial lunacy. It costs £150 to give a family debt advice. It costs £15,000 to re-house a family. I shall be very interested to hear how the Minister can defend such a lunatic policy.

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[Ian Austin]

You have the opportunity.

[Mr Hayes]

I am not usually terribly critical about Back Benchers making comments. The contribution of hon. Member for Bishop Auckland (Helen Goodman) was pretty intemperate, so she will understand my response being in the same vein.

I made a commitment that the Minister responsible will write to Members who have raised sensible questions, as the Opposition spokesman, the hon. Member for Llanelli (Nia Griffith), did, and will deal with them in a particular and specific way. I shall restrict my comments to some points of principle and detail, and make one or two further commitments.

Before I make the points of principle, let me add this: three points have emerged from the debate. First, debt is closely related to more general well-being, and that needs to underpin the Government’s approach. Secondly, our approach should be co-ordinated and, thirdly, coherent. That has come across strongly from Members on both sides of the Chamber. We heard a speech from the hon. Member for Bishop Auckland, which I critiqued earlier, and speeches from my hon. Friends the Members for Solihull (Lorely Burt), for Warwick and Leamington (Chris White) and for Brigg and Goole (Andrew Percy) and from the hon. Members for Newcastle upon Tyne North (Catherine McKinnell) and for Scunthorpe (Nic Dakin). The hon. Member for Scunthorpe made one point particularly clearly when he rightly said that debt was related to well-being and mental health in a very broad sense. Other Members pointed out that we need a consistent and coherent approach.

I shall make six points of principle and then move on to some points of detail that inform the Government’s position.

Education Maintenance Allowance

Lord Austin of Dudley Excerpts

Wednesday 19th January 2011 Commons Chamber

[Ian Austin (Dudley North) (Lab)]

I met students at Dudley college, 78% of whom receive EMA. More than 90% of them told me that they would be unable to continue their education if EMA was withdrawn. They are not using it for luxuries but for their books, bus fare and lunch. In particular, those on vocational courses who are studying construction, catering, hairdressing and so on need to buy uniforms and equipment. That is what they are spending it on, and if it is withdrawn they will not be able to continue their education.

[Andy Burnham]

My hon. Friend represents a constituency with one of the highest take-up rates of EMA in the country, and he is absolutely right. Some of the sneering comments about recipients of EMA show a complete failure to understand what their lives are like and underestimate the determination of those young people to make a success of themselves and to get skills that will stand them in good stead throughout the rest of their lives.

Oral Answers to Questions

Lord Austin of Dudley Excerpts

Thursday 13th January 2011 Commons Chamber

[Vince Cable]

The hon. Gentleman is an authority on this; I think that he was entrepreneur of the future several years ago. We do have the growth funds that provide equity. He may also have noticed that as a result of our discussions with the banks, they have established an equity fund in order to achieve precisely the aims that he describes.

[Ian Austin (Dudley North) (Lab)]

9. When he expects the independent advisory panel to meet to consider applications to the regional growth fund.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The advisory panel is currently expected to meet in late February to consider applications from the first bidding round to the fund—once, of course, the bids have been processed.

[Ian Austin]

When the panel meets, will the Minister ensure that the west midlands, hit hardest during the downturn and taking the longest to recover, gets the greatest help from the fund? Does he accept that the fantastic work that has been put in by business men in the black country to get our local enterprise partnership off the ground will be seriously hampered if they do not get the funds they need from the regional growth fund?

[Mr Prisk]

I very much welcome the work that has been undertaken by businesses in the black country, and I pay tribute to them for that. Of course, the regional growth fund has to be based on merit, because it needs to be focused on making sure that the best cases come forward. Like the hon. Gentleman, I suspect that some excellent examples will come forward from his area, and from the west midlands as a whole. Cases must be judged on merit alone.

Oral Answers to Questions

Lord Austin of Dudley Excerpts

Monday 15th November 2010 Commons Chamber

[Mr Hayes]

The right hon. Lady will know that the evidence that I described in answer to an earlier question is clear about the ineffectiveness of EMA. That is supported by a letter that I received recently from north-west England from a teacher with 12 years’ experience in her area who said:

“I would like you to withdraw EMA”

because it is just not effective. We act on the basis of evidence.

[Ian Austin (Dudley North) (Lab)]

18. What assessment he has made of the likely effects on sport in schools of planned changes in his Department’s expenditure.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

The planned changes in the Department’s expenditure on school sport, beginning in 2011-12, will enable us to deliver on our coalition Government commitment to create an annual Olympic-style school sport event to encourage more competitive sport in schools.

[Ian Austin]

Just because the Secretary of State hated sport when he was at school, that is no reason to deprive today’s youngsters of the opportunity to take part. When we came to power, just two out of 10 youngsters did two hours of sport a week; today the figure is nine out of 10, as a result of the extra funding and support that we put in. How many will it be as a result of the Government’s cuts?

Oral Answers to Questions

Lord Austin of Dudley Excerpts

Thursday 14th October 2010 Commons Chamber

[Mr Prisk]

You are very kind, Mr Speaker. There will be a sub-regional White Paper in due course.

[Ian Austin (Dudley North) (Lab)]

The deep-seated structural challenges facing the west midlands economy mean that our region has been hit harder by the downturn than anywhere else in the country, and the recovery will take longer, too. Is the Secretary of State prepared to meet a cross-party delegation of Members of Parliament from the west midlands and business leaders from the region so that we can discuss plans to bring new industries and new jobs to the region?

[Vince Cable]

I am happy to do that. In recent times, I have met Opposition Members from the west midlands who were concerned about the car industry and others who were concerned about ceramics. I am happy to meet the hon. Gentleman and his colleagues.

Free Schools Policy

Lord Austin of Dudley Excerpts

Monday 21st June 2010 Commons Chamber

[Michael Gove]

My hon. Friend is a former teacher, and a brilliant one at that. We will ensure that all academies continue to abide by the same rules on admissions, hard-to-place children and exclusions that apply to all state schools.

[Ian Austin (Dudley North) (Lab)]

The Secretary of State knows that I have spent the past five years trying to persuade the councils responsible for Dudley school to transform standards by introducing academies and producing a decent bid for Building Schools for the Future. Before the election I was promised that the Department had funds available if the councils were able to produce a decent bid. Does that promise still stand?

[Michael Gove]

I know how passionate the hon. Gentleman, who is the son of a head teacher, is about ensuring that that school moves towards achieving academy status, and he knows how keen I am on academy status. I suggest that he come into the Department, so that we can talk about exactly how we can advance that programme.

Oral Answers to Questions

Lord Austin of Dudley Excerpts

Monday 7th June 2010 Commons Chamber

[Michael Gove]

I am very grateful to my hon. Friend and congratulate him on his election. Both he and his predecessor have been impassioned champions for the interests of the Jewish community and other faith communities in the London borough of Barnet, and I am deeply concerned that parents of Jewish children have to pay out of their own pocket to ensure that their children are safe in school. It seems to me quite wrong that, simply because of the faith or community from which a child comes, their parents should have to pay extra to ensure that they are safe. That is why I have asked for talks with the Community Security Trust and the Board of Deputies of British Jews—to ensure that we can do everything possible to safeguard those children.

[Ian Austin (Dudley North) (Lab)]

I think that I have discovered why the Secretary of State was so disparaging about the recipe book that the previous Government produced, which as you will recall, Mr Speaker, included recipes for proper English food, such as Lancashire hotpot and cottage pie. The right hon. Gentleman might not have heard of those, because I understand from The Times this morning that his favourite meal is something called “scaloppine with parmentier potatoes”. I am afraid that we cannot get that in Dudley, so I asked somebody more familiar than myself with the fancy foreign food available in expensive London restaurants, and apparently it is veal. Is that what the pupils of Britain can look forward to eating now that the Notting Hill elite are running the Government?

[Michael Gove]

I am enormously grateful to the hon. Gentleman for paying such close attention to my wife’s column in The Times. I should point out that the issue is not about fancy London restaurants; I do not have time to eat in them. The dish is cooked by my wife, and, if he and his wife would like to come round for dinner, scaloppine will be on the menu. I shall make sure that I have some Banks’s Mild, as I know that it is his favourite tipple, and we will have an opportunity to discuss together how I can help the black country.