Destitution: Low Median Wage

Lord Bishop of St Albans Excerpts

Thursday 23rd November 2023 Lords Chamber

[Baroness Vere of Norbiton (Con)]

What we did yesterday—and we were absolutely clear about this—was to reward workers. It is critical that we reduce work-related taxes, because by doing so we increase the number of hours worked, which will lift the number of full-time equivalents by 94,000. We think that the cut yesterday was absolutely the right thing to do.

[The Lord Bishop of St Albans]

My Lords, we on these Benches welcome a number of aspects of the announcements yesterday in the Autumn Statement, not least the rises in the living wage and in pensions. There is an issue, though, over structural pay gaps which hide even greater disparities: pay gaps to do with gender, disability, social mobility and regional disparities, which are vital as we think about our levelling-up strategy. Can the Minister give us some indication of how the Government hope to address those structural pay differentials and gaps?

[Baroness Vere of Norbiton (Con)]

What we are trying to do here is boost the entire economy by ensuring that everybody has good work. It is the case that, between the Spring Budget of 2023 and the package that we announced yesterday, there will be more than 200,000 more jobs, but what we are also trying to do is boost the economy in general such that those jobs are well paid. The right reverend Prelate mentioned those who might be sick or disabled. Again, we have to support those people back to work when they can, because we know that work is the best way out of poverty; it can have social and health benefits. At the moment, there are 2.4 million claimants of incapacity benefit, and that has gone up by 700,000 since May 2019. I cannot believe that the nation is getting significantly more sick, and we need to help those people back to work.

King’s Speech

Lord Bishop of St Albans Excerpts

Monday 13th November 2023 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, I declare my interest as president of the Rural Coalition as set out in the register. That means that I want to reflect for a few moments on the environmental and rural dimensions of some of the legislation that will be coming our way over the coming year.

I will make a couple of preliminary comments. Back in 2015, His Majesty’s Government responded to the independent rural-proofing implementation review by the noble Lord, Lord Cameron of Dillington. Among the recommendations was that

“Defra Ministers should work with Cabinet Office to strengthen and improve rural proofing guidance when the impact of policies is being assessed, to ensure that rural policy impacts are given clear and robust attention”.


It is clear to many of us in the Rural Coalition, and many Members of your Lordships’ House who have a particular interest in rural life and rural industry and economy, that many policies and Bills are still not being properly rural-proofed. Some 9.6 million people live in our rural areas. It is vital that we attend to this dimension of legislation as it goes through Parliament.

The second general point I want to make is that Section 17(5) of the Environment Act 2021 introduced the five principles that would

“protect and enhance our environment and preserve England’s unique natural assets, all within the context of building resilience to biodiversity loss and the effects of our changing climate”.

This legally binding commitment needs urgently to be applied to each Bill we debate in the next Session to ensure that we consider the environmental impacts of proposed legislation that comes before your Lordships’ House.

I want now to make some brief comments on three of the Bills in the King’s Speech, one of which strays briefly into the themes of another day of this debate. The first is the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill. Our domestic agricultural sector is world leading. While welcoming the UK’s membership of the CPTPP, I believe it is essential that UK farming is not disadvantaged or weakened. We must use this opportunity to drive up standards in other countries and not allow our standards to drop to theirs. In particular, we urgently need a better and more accurate system for food labelling, especially with regard to country of origin. For example, meat products should be shown as British only when the livestock has been born, fattened and slaughtered here.

Secondly, I welcome the animal welfare (livestock exports) Bill, which will stop the export of livestock for fattening and slaughter once and for all. Although livestock is not currently exported for this reason, in the past many animals were in transit for long periods, which caused unnecessary suffering. It is also well documented that some overseas abattoirs to which they were taken do not have the same high standards that we provide in the United Kingdom. I congratulate His Majesty’s Government on the announcement some months ago of a fund of £4 million for smaller, more local abattoirs in this country, which will also be a more humane way to treat our livestock. This is especially important as the number of small abattoirs in the UK has declined dramatically over recent years.

Finally, I will say a few words about the tobacco and vapes Bill, which I warmly welcome. I am very supportive of the aims of that Bill. Other Members of your Lordships’ House have already noted that there is a problem with around 5 million disposable vapes being used each week in the United Kingdom. Each of those vapes has a battery which uses metals such as copper and lithium. The Green Alliance has estimated that enough lithium has been disposed of to create 5,000 batteries for electric cars. Surely there is a powerful argument for a complete ban on the sale of disposable vapes here in the UK. I expect that Members of your Lordships’ House will plan to bring amendments to that Bill as we seek to focus it and make a real improvement as we take it through.

British Banking Sector

Lord Bishop of St Albans Excerpts

Tuesday 21st March 2023 Lords Chamber

Asked by

[The Lord Bishop of St Albans]

To ask His Majesty’s Government what assessment they have made of the health of the British banking sector, following the challenges faced by overseas banks.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

The UK Government welcome the steps taken to support financial stability on Sunday by the Swiss authorities relating to Credit Suisse. This follows the sale on 13 March of Silicon Valley Bank UK to HSBC after the resolution of its US parent. No other UK banks have been materially affected by these actions. The Governor of the Bank of England has confirmed that, in his view:

“The wider UK banking system remains safe, sound, and well capitalised.”

[The Lord Bishop of St Albans]

I thank the Minister for her reply. Many people watching the events unfold at the moment are concerned that they may lose their jobs or that there will be another financial hit to people at a time of high inflation. It is 10 years since we had the publication of the Parliamentary Commission on Banking Standards report. One of its conclusions was that the implicit taxpayer guarantee gives banks

“access to cheaper credit than would otherwise be available and creates incentives for them to take excessive risks.”

Do His Majesty’s Government have any steps to remove the implicit taxpayer guarantee? If not, what other incentives will His Majesty’s Government give to ensure that bankers act prudently?

[Baroness Penn (Con)]

My Lords, I emphasise to people at home the words of the Governor of the Bank of England that the UK banking system

“remains safe, sound, and well capitalised.”

The situation is different from 2008. Over the last 15 years, the Government and the Bank of England have taken robust action to strengthen the regulatory system and the resilience of the UK banking system. Specifically to the right reverend Prelate’s question, we have put in place a resolution regime to ensure that the failure of a bank can be managed in a way that minimises the impact on depositors, the financial system and public finances. I note that the resolution solution found for Silicon Valley Bank last week involved no UK taxpayer money whatever.

Financial Services and Markets Bill

Lord Bishop of St Albans Excerpts

Committee stage
Tuesday 7th March 2023 Grand Committee

[The Lord Bishop of St Albans]

My Lords, I will not detain the Committee for very long but perhaps I could say one or two things. Briefly, I come at this by thinking about rural sustainability and rural business. I declare my interest as president of the Rural Coalition.

Before I say anything on that, a month ago I had my wallet stolen on my way into Parliament and I learned a lesson: do not keep all your cards in your wallet but have some different ones. I was, to use a theological term, absolutely stuffed that morning. Fortunately, I had a member of staff at home. I went back and cancelled the cards then phoned up my bank, which said, “Yes, come up—we can give you some cash”. When I got up there, I was told, “No, the system’s got it wrong and we aren’t able to give you cash here”. I then had to get someone to take me six miles to get some cash. When I eventually got into London for some meetings, I went to four places before I could find somewhere to buy lunch because I had only cash. This is actually quite a complex thing.

Actually, I agree with the noble Baroness, Lady Noakes: there is a huge change going on—of course there is. But how are we to work with that, not least if we are going to think about levelling up? In my diocese, for example, if I go into Citizens Advice in poor areas in Stevenage, they tell me that people sometimes positively get rid of their credit and debit cards because they do not know how to control money. There are some real issues here about financial literacy and discipline to help people with saving and so on.

Going back to the rural issue, much of this stuff depends on rural businesses having broadband. Large rural areas of our country are not-spots, where there is no access. Some places do not even have good access on a direct phone line, certainly to do some forms of banking. I therefore think that we are in a transition period. We certainly need protections in place for the foreseeable future as we try to work out how this goes and how we take it forward.

I was recently in the small rural town of Ampthill in my diocese in Bedfordshire. A whole group of people talked to me afterwards; they got on to this subject and said how it really affects small start-up businesses at the moment. I hear that we have to think about how we should take this forward but, over the coming years, we need some sort of provision to guarantee some basic levels of service so that we can help rural sustainability, rural businesses and individuals who live in those areas.

Financial Services and Markets Bill

Lord Bishop of St Albans Excerpts

2nd reading
Tuesday 10th January 2023 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, theologians sometimes discuss the personal and social ethics in the teaching of Christ under the three headings of money, sex and power, those three areas which can be the most extraordinary gift and blessing when used rightly and for the common good but which, when they are an end in themselves, can become extraordinarily disruptive. Of these three areas, Christ had most to say about money, as its use reveals our values as individuals and as a society, often in a very stark way. A close reading of this Bill reveals a set of cultural assumptions and values about what is considered important and valuable. There are four areas that I want to highlight and which we need to consider if a growing and vibrant financial sector will work for the common good.

First, on crypto asset regulation, as others have said, we need to act fast both to protect our citizens and so that we do not fall behind the rest of the world. The problem at the moment is that the almost complete lack of regulation means that, for many people, crypto- currencies are just another form of gambling. The recent collapse of FTX has demonstrated the volatility of this market and its vulnerability to fraud. Some have made a fortune, while others have lost their life savings and will now be looking to the state to provide for them. Just as we need a sensible and balanced approach to the regulation of online gambling, so we need sensible, balanced regulation of crypto- currencies. The provision in this Bill to ensure that crypto is treated as a regulated activity and giving the FCA and the PSR the power and, as others have noted, the resources to do their work and to protect customers, is welcome.

Secondly, His Majesty’s Government’s laudable levelling-up agenda needs to ensure access to cash. Here I declare my interest as president of the Rural Coalition. Over 8 million people across the UK rely on cash, primarily the elderly or those who live in rural areas or not-spots, where you cannot get online. Poorer areas are being dominated by pay-to-use cash machines, which hit poorest people the hardest. Research indicates that the most deprived areas are dominated by private operators charging those most affected by the cost of living crisis to withdraw cash. This is the poverty premium, where the poorest are forced to pay more for essential services. When the Minister sums up, can she tell us whether the FCA is under the same obligation as government departments to rural-proof the regulations that it makes about access to cash? If not, will this requirement be introduced?

Thirdly, I welcome the proposal for credit unions and urge His Majesty’s Government to explore ways in which we can encourage their growth. The Church of England has been involved in a very large project using the insights of credit unions in our secondary schools to teach financial literacy, and to teach young people how to handle cash and their money and how to plan responsibly. We need to build on this work urgently.

Fourthly, on green and zero carbon, it is more urgent than ever that we introduce mandatory net-zero transition plans, so that large companies report on how they will manage the transition to net zero. We are told that the Bill will update

“the objectives of the financial services regulators to ensure a greater focus on long-term growth and international competitiveness.”

However, if we are to fulfil our COP 26 commitments, it will also need a secondary statutory objective to protect and restore nature and deliver a net-zero economy. There is much to be welcomed here, but there is a great deal more work to be done.

Stock Markets

Lord Bishop of St Albans Excerpts

Thursday 17th November 2022 Lords Chamber

Asked by

[The Lord Bishop of St Albans]

To ask His Majesty’s Government what assessment they have made of the impact of Paris overtaking London as Europe’s most valuable stock market.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, according to the Global Financial Centres Index, London is the second highest-ranked financial centre in the world after New York, while Paris is 10th. The UK continues to be the pre-eminent financial centre for derivatives and foreign exchange trading. In all equities instruments, the UK almost doubles France’s total market capitalisation at $6.2 trillion. To support the UK’s competitiveness, the Government are undertaking ambitious reforms to keep pace with innovation.

[The Lord Bishop of St Albans]

My Lords, I totally accept that there are various people trying to analyse the levels of trading—although it was a wake-up call last year when on some grounds Amsterdam was seen to overtake London as the premier financial trading centre, and last week some of those organisations claimed that Paris had overtaken London as the premier stock exchange. In the light of us trying to build an economy which properly rewards our workers and protects our environment, what are His Majesty’s Government doing to increase confidence in London’s reputation in financial trading and as the premier stock market?

[Baroness Penn (Con)]

I am so glad that the right reverend Prelate has given me a chance to set out what the Government are doing. The Financial Services and Markets Bill has just completed its work in Commons Committee, setting forward a whole range of reforms to inherited EU law to make us more competitive. He also mentioned the environment. The Government’s ambition is to make London the premier place for green finance, to ensure that our financial markets take into account the challenge of climate change, so that we then can ensure that we are pursuing green growth across the whole of our economy.

Financial Markets: Stability

Lord Bishop of St Albans Excerpts

Thursday 3rd November 2022 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, we are living in challenging times, with inflation rates at a 40-year high. Turbulence in the financial markets, with higher interest rates and larger mortgage payments, is adversely affecting people in all walks of society. With the wholesale price of energy and gas increasing due to Putin’s appalling and illegal invasion of Ukraine, it is vital that His Majesty’s Government do all they can to protect renters, those with mortgages and, of course, pensioners.

To put a human face to this debate, I thought it might be worth while just quoting one of a number of emails I have received from communities in my diocese this very week. One person emailed me on Friday: “In my role as chair of a food bank, we are having to make decisions around both frightening increases in demand and a growing decline in donations. This summer, we increased our warehouse capacity to handle food for somewhere around 500 food parcels a day. The problem is in-work poverty which is growing substantially. In the past few weeks, we have been approached by a hospital, a large business, schools and a local council about whether they can refer low-paid staff to us.” He went on: “Apparently, employers are not prepared to talk about the problem of in-work poverty, feeling ashamed. They would like to raise wages and want the best staff welfare but can’t because that would move them into a deficit budget.” The human reality of what we are facing is stark. Unfortunately, the mini-Budget of 23 September made a challenging financial climate much worse.

I want to say a few words about the challenges facing pensioners. Statistics show that more than 2 million pensioners are living in poverty, with this figure increasing by around 200,000 in the last year. Age UK has suggested that one-quarter of elderly people are being forced to choose between heating and eating. These pressures are being felt particularly by those who are reliant on the state pension alone. I know many of us are hoping that in the forthcoming Budget we will be given some assurances about the commitment to maintain the level of state pensions.

I turn to private pensions for a moment and particularly raise concerns about the use of LDIs, which other noble Lords have mentioned. According to the Pensions Regulator, 60% of defined benefit pension funds incorporate LDIs. Without the Bank of England’s promise this September to purchase £65 billion in government debt, it is near certain that some of these funds would have been imperilled—that is perhaps a very mild description. The Bank of England has described this scenario as capable of

“driving a potentially self-reinforcing spiral and threatening severe disruption of core funding markets and consequent widespread financial instability”.

I understand why LDIs are being used. Nevertheless, as in many things, the issue is how and to what extent they are being used. I have heard reports that some of the funds were using too much leverage with too little protection and in so doing potentially causing a great deal of danger not only for themselves but to more responsibly managed pension funds and markets. We have to ask, and I hope the Minister will give some reassurance on this: are these LDIs being properly regulated? Are the risks really understood so that we are protecting pension funds? Are they subject to adequate stress tests? Indeed, I am tempted to throw in the question: if we are worried about LDIs, are there other financial investment mechanisms that might threaten the long-term stability of pension funds?

The Government must ensure that pensioners, some of the most vulnerable in our society, are protected from the riskiest of investment policies adopted by some pension funds. Will His Majesty’s Government investigate the use of LDIs by pension funds and ensure that pensions are properly protected?

Money Advice Service

Lord Bishop of St Albans Excerpts

Thursday 12th March 2015 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for initiating this timely and important debate on a subject which is affecting all parts of society, sometimes with devastating social effects. While the Farnish review has yet to be published, there is no doubt that attitudes to finance and debt in the UK are a matter of real concern. It is not always easy to get precise data on what exactly is going on, but there is evidence that levels of personal debt are continuing to rise, with reports this January of new consumer debt climbing to heights that have not been reached for nearly seven years. The £1.25 billion net increase in unsecured borrowing seen in November 2014 was the third month out of five when consumers had taken on more than £1 billion of new debt.

Over recent decades, many people have come to presume that it is normal to live with debt, in some cases with considerable levels of debt. Anecdotal reports from Citizens Advice centres and other organisations working in debt advice describe the terrible problems caused for some individuals and their families. This is a profound societal change, which has developed over a number of years under different Governments and could lead us into very serious problems in the future if the trends cannot be reversed.

The problems of indebtedness are clearly too deeply rooted to be swept away by the very welcome improvements in the UK’s economy over recent months. However, it is important to keep a close eye on these trends and the extent of the rise in personal debt, not just because of those individuals I have already mentioned but because it could possibly threaten financial stability in our economy. I wonder whether the Minister could tell us what assessment Her Majesty’s Government have made of the rising levels of personal debt and, in particular, whether they have any views about the level at which such personal debt could threaten the economy? At what point does that become something of significance for everyone?

If we are to achieve sustained attitudinal change towards personal debt we need to work in the coalitions that my noble colleagues have already spoken about, made up of government, the third sector and civil society institutions. A key part of this partnership must be to improve the availability, quality and consistency of debt advice in this country. For this reason, the Church of England is keen to support the work of the Money Advice Service and other debt organisations. We are concerned that the Money Advice Service should target its work and its resources be deployed as effectively as possible. With the demand for debt advice expected to double over the next five years, the challenges facing the sector are huge.

Locally, many churches are actively involved in helping people affected by debt. There are 270 debt centres affiliated to Christians Against Poverty; I have recently been closely in touch with one of them in Christ Church in Ware, in Hertfordshire. About 140 church-based centres are supported by Community Money Advice. Another church in my diocese, in Bedford, runs Money Advice at St Andrew’s, a free, confidential service financed by church members and used by a large number of people. Many other churches provide informal help to those who are struggling with their finances.

Nationally, the Archbishop’s task group is promoting the use of responsible credit and saving to ensure that there are real alternatives to payday loans and other forms of high-cost credit that push many people into problem debt. We are also very pleased to be working with the Money Advice Trust, to which my noble friend Lady Coussins has just referred, the charity that runs National Debtline, to develop a debt awareness and signposting resource. This will better enable congregation members and volunteers to raise awareness of free debt advice and help those in financial difficulty get the advice and support that they need.

As well as helping those struggling under the burden of debt, we need to work to move our society away from the current situation in which indebtedness is increasingly seen as the norm. We need to find ways of changing attitudes to credit and saving for the long term. I therefore want to focus my remaining remarks on financial education, which is equally important but still an underfunded element of the Money Advice Service’s financial capability strategy. I welcome the strategy’s emphasis on improving the financial capability of children and young people, and agree with its recommendation that the Government should consider the case for adding financial education to the primary school curriculum in England.

Young people today grow up in an increasingly complex world, requiring them to make difficult choices that will often have a significant impact on their future. They live in a culture that is heavily influenced by consumerism, and even very young children are being targeted by commercial companies because of their “pester power” and very real spending power. Online shopping, mobile phone contracts, tuition fees and the accessibility of credit cards mean that many young people are making financial decisions and are exposed to debt at a very young age. Millions of children are directly affected by overindebtedness as their parents struggle to keep up with their bills and credit commitments. Teaching our young people financial responsibility is vital.

At the same time, evidence from national and international surveys shows that the younger generation has lower levels of financial capability than their parents. If we are to enable future generations of young people to manage their finances well, children must be given high-quality financial education in school so that they can make informed choices and take responsibility for their actions. Sadly, that imperative is not yet adequately reflected in our education system. Although 94% of teachers and 79% of parents think that it is important for young children to learn about money and financial matters at school, only about one-third of primary schools teach financial education, and only 5% of parents think that young people are leaving school with the financial skills and knowledge that they need to manage their finances.

That is why the Church of England is working with the Personal Finance Education Group, now part of Young Enterprise, to establish an effective national financial education programme for primary schools centred on school-based savings clubs. Building on the evidence set out in the financial capability strategy and elsewhere, we want to give children the opportunity to learn about money at a much younger age, focusing on developing good attitudes and habits towards money, including practical experience of managing their own money. We want to involve parents and the wider community in children’s financial education, so that positive messages about money are being reinforced from a range of different sources. We are very grateful to this Government for funding the pilot of the LifeSavers programme, starting in Bradford, Nottinghamshire and south-east London, and we hope that it will be the beginning of a stronger and long-term commitment to financial education in this country.

Finally, one practical thing that we can do is to encourage take-up of credit unions. I am glad that the St Albans credit union, of which I am a member, not only helps many adults who need advice and help but pays regular visits to one of our local schools to encourage saving. I hope that we can find ways to build on such partnerships to increase financial literacy and responsibility. To that end, the review by the Money Advice Service is vital to ensure that we are doing all that we can to improve the situation for both this generation and those to come.

Credit Unions

Lord Bishop of St Albans Excerpts

Tuesday 3rd February 2015 Lords Chamber

[Lord Newby]

As my noble friend says, this is a very important issue for people on low incomes. A number of the largest credit unions already offer current accounts that have a direct debit facility. However, they are still a small minority. This is an area where the Credit Union Expansion Project is very important, as it will allow more of them to offer such services.

More generally, the Government’s announcement in December about basic bank accounts means that people who open such accounts will have access to a range of normal personal current account facilities, including direct debits.

[The Lord Bishop of St Albans]

My Lords, I imagine many of us are concerned about the culture of debt that seems to be normative in many parts of our society. In the light of this, can the Minister tell us whether the Government have any plans, first, to encourage all schools to consider working closely with credit unions, as in the case of the credit union in St Albans, where I come from and, secondly, to further roll out and encourage payroll savings schemes as part of a wider initiative to encourage saving and financial responsibility across society?

Financial Services: Cold Calling

Lord Bishop of St Albans Excerpts

Monday 17th November 2014 Lords Chamber

[Lord Newby]

I will definitely relay the noble Baroness’s request to my noble friends. As she will know from Committee on the Bill, a number of examples were given which made it less straightforward than she suggests, not least in terms of family members having access to calls being made from organisations such as helplines.

[The Lord Bishop of St Albans]

My Lords, I wonder if I could press the Minister again, particularly on payday loans. The recent report published by the Children’s Society, Playday not Payday, has highlighted the regulatory gap whereby payday loan companies can make unsolicited marketing calls, whereas, as we have heard, mortgage providers are not allowed to. That report showed that over 40% of people who have taken out payday loans are receiving on average more than one unsolicited phone call a day. Does the Minister not agree that the provisions that prevent the mortgage providers from making that sort of marketing approach really must now be brought in for the payday loan companies in order to protect those who are most vulnerable?

[Lord Newby]

The very specific arguments that apply in respect of mortgages do not apply to payday loans. The key thing about payday loans at the moment is that the payday loan companies are being regulated for the first time, which is leading to a collapse in the number of payday loan companies, so that it is expected that we may end up with as few as four payday loan companies in operation at the end of this process. However, the FCA is undertaking an in-depth thematic review of the debt management sector to assess the quality of advice and the area mentioned by the right reverend Prelate. If it finds substantial evidence of consumer detriment of the kind he suggests, it will be able to consider the scope of further regulations.