Creditworthiness Assessment Bill [HL]

Debate between Lord Bird and Lord Taylor of Holbeach

2nd reading (Hansard): House of Lords
Friday 24th November 2017 Lords Chamber

[Lord Bird]

I thank your Lordships very much for that interesting discussion about what we all agree is an irregularity that happens when you live in poverty. It is one of the many irregularities there. What I found quite interesting about the Minister’s response is that when it comes to a market-based solution, which the Conservative Government would obviously love to promote, there is a bar on operating in the market healthily. People say, “I have a mortgage, therefore I am much more reliable and bankable than if I am a tenant who pays rent”. What is so interesting is that there are probably millions of such people who the lenders would love to lend to, but they do not have the information. They do not have the key to the door. If it was a true market-based solution, it would be a matter of turning to tenants and saying, “Show us how reliable you are by showing us the data you’ve collected over the years by paying your rent”.

The Bill opens up the possibility of enfranchising a whole group of people who are disfranchised now. Fintech goes towards the idea that you can gather your own data and share it with a third party, which may or may not choose to lend you the money. There are ways towards a solution and the fintech will come along, irrespective of whether we see it in, but there is this entrenched idea. The work of the Big Issue has proved that the evidence is there that millions of people are being disfranchised, and that it is affecting the health of the market. If we really want to find a market-based solution let us look at a true one that includes those people, who are not able to participate in the market.

The Bill is also a bit broader in its base; it is not exclusively about people getting mortgages. I think there was a kind of wrong-footing—not intentional, because I trust the Government to be noble in all things—that we are talking about mortgaging and housing. We are actually talking about, for instance, people moving into social housing. When you go into the apartment, what have you got? You might have a gas oven or an electric oven, but where are the white goods? You move in, you are on universal credit and you have to wait until you can buy the goods that enable you to feed your family. What happens? You then have to turn to BrightHouse. You have to turn to BrightHouse because you are desperate to feed your children and therefore you have to go to a very narrow sector of the credit market, and that sector knows that you are hoist by your own petard when it comes to your poverty and it is going to charge you through the nose. That is a disreputable thing masquerading as a part of democracy. You take it or leave it. We need to recognise that somebody’s credit score should begin to liberate them and enable them to begin the process of their own reconstruction. It is about people reconstructing themselves, irrespective of how hard and tirelessly we work to extend the franchise that we need to extend around credit.

I thank noble Lords for taking part in this debate, which I enjoyed very much. I very much enjoyed the comments made by the noble Lord, Lord Davies. I can see he is not a pusillanimous man. He upped the game. I enjoyed the contributions of the noble Baronesses, Lady Thornton, Lady Grender and—unfortunately I did not get her name.

[Lord Taylor of Holbeach (Con)]

Lady Wilcox.

[Lord Bird]

God bless you. I am only a new boy. When, or if, we get this Bill through the House, it will benefit all political persuasions in the House because we will all be able to do our job around poverty a little better, but we will also have to make sure that in the detail, where we know the devil is, we do an awful lot of work for people who are left out and whose credit is damaged.

I was out last night talking to some homeless people. A big problem is that they have no credit references. One of them, a young woman, had been driven out because of problems around credit and her ability to respond to it. When you see those things, you know that we have an emergency on our hands and we need to do something very desperate. One of the ways we can do that is by helping people with their credit while making sure that people who are not the low-hanging fruit do not get left behind. We have to ensure that there are all the safeguards so that people can opt out and not be punished in the process. I thank all noble Lords.

Bill read a second time and committed to a Committee of the Whole House.