Pension Review: Phase 2

Lord Kennedy of Southwark Excerpts

Wednesday 18th December 2024 Lords Chamber

[Lord Bellingham (Con)]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, it is time to hear from the Green Benches now.

Rent Officers (Housing Benefit and Universal Credit Functions) (Modification) Order 2023

Lord Kennedy of Southwark Excerpts

Wednesday 22nd March 2023 Lords Chamber

This truly is an indefensible statutory instrument. I cannot help thinking that, because it is a financial matter, this House is not in a position to move a fatal Motion—but, boy, should we be doing that if we want to act for some of the poorest, most disadvantaged people in the most desperate circumstances in our country.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, like others, I thank the noble Baroness, Lady Thornhill, for tabling her Motion and wish her a speedy recovery. I also thank the noble Lord, Lord Shipley, for moving the Motion on her behalf. I say at the outset that I think I agree with every word that every noble Lord has said so far in this short debate on the regulations before us.

When local housing allowances were introduced in 2008, the aim was to reach up to the 50th percentile of all rents in a broad rental area. In other words, people on benefits could afford to live in the cheapest half of rented properties in the area that they live in. However, from 2011, that all changed. First, LHA rates were downgraded to the cheapest 30% of local properties. Then, rather than moving with rent levels, LHA rates were uprated by inflation, then by just 1% and, finally, they were frozen in 2016. The result was that, by 2020, LHA rates bore no connection to the actual rents in local areas. In 2020, the Government restored them to the 30th percentile, only to then freeze them in cash terms. This year, although Ministers finally agreed to raise most benefits by inflation, they excluded LHA rates. The effect of this freeze is seen in a growing gap between the actual rents that people pay and the amount of housing support that they can receive—an approach that the Institute for Fiscal Studies said was

“arbitrary and unfair, and its consequences will only become more bizarre over time.”

There is deep and widespread concern in the housing world about the effects of this policy. The Northern Housing Consortium told Ministers that

“a continued freeze on LHA would make it even harder for existing private renters to make ends meet, risking homelessness and making it increasingly difficult for local authorities to discharge their homelessness duties effectively.”

It reported in the Northern Housing Monitor 2022 that only 7% of rental adverts were affordable to those reliant on LHA in the north. The National Residential Landlords Association says that the LHA rate freeze has

“led to the proportion of landlords letting to tenants in receipt of benefits falling over the past decade.”

If supply falls, demand does not, if only because there is no alternative. The Levelling Up, Housing and Communities Committee, in its report on the private rented sector in February—my noble friend Lady Lister made reference to this report—concluded that the failure to ensure LHA rates keep pace with market rents

“is quite obviously making the private rented sector even less affordable for many people who are only there because the social housing sector has been cut back and can no longer accommodate them.”

That is the problem.

Unsurprisingly, given high inflation and the pressure on supply, while LHA rates are frozen in cash terms, private sector rents have continued to rise, so the gap is getting bigger year on year. The Institute for Fiscal Studies says that, compared with uprating LHAs to match local rents, the freeze will reduce support for nearly 1.1 million households by an average of £50 per month, saving the Government more than £650 million in 2023-24. That is on top of the amount that people were already having to find as a top-up. Over 800,000 households in the private rented sector face a shortfall between their rent and their local housing allowance, including over half of all universal credit households who rent privately. The Institute for Fiscal Studies further says that

“two-thirds of lower income privately renting households must cover at least a quarter of their rent from sources other than housing support.”

The House of Commons Library briefing, which has been referred to in this debate, says that, from April 2023, on average, households will need to top up their rent by

“just under £750 a year.”

People in households with a disabled person are more likely to be hit by LHA shortfalls. Paul Sylvester, head of housing operations at Bristol City Council, told the Work and Pensions Select Committee in 2021 that half the households they saw with a shortfall included a disabled person. They were increasingly seeing disabled people forced to use their disability benefits to cover the rent top-up, rather than what the benefits were meant for. Can the Minister say whether the Government have looked at the impact of this policy on disabled people specifically? And the problems are not equally distributed. The IFS cites the example that, while the 30th percentile of rents in Bristol is £100 more than in Newbury, the amount of housing support that those who live in Bristol can receive is £12.50 less than those who live in Newbury can receive. How can this be right? Can the Minister please explain?

I have no doubt that the Minister will try to suggest that there is not a problem, because anyone who is struggling can always request a discretionary housing payment: other noble Lords referred to this in their contributions. But let us be clear: a discretionary fund for one-off payments is not the answer. In any case, a report by Shelter published in February—again, this has been referred to—found that the Government’s own data showed that councils were already struggling to keep up with demand. It says:

“Some were on the brink of running out of funding—31 English councils had spent three quarters or more of their allocation before the winter started”.


It points out that the problem is especially bad in certain regions. Take the north-east: Sunderland, Gateshead and Northumberland spent more than 90% of their allocation by the end of September 2022, and none of this is surprising given that DHP funding was cut by £40 million in this financial year. At a time when inflation is dangerously high and food bank use is at record levels, how do Ministers expect those on low incomes to find ever larger sums to top up their rent?

We see from the figures that homelessness is soaring. Rough sleeping is up by 74% since 2010 and by 26% in the last year; there has been an 83% rise in the number of children now living in temporary accommodation as a result of homelessness. One in 23 children in London is now homeless. The squeeze on local housing allowance is undoubtedly a major driving factor in this situation. It is also hitting local authorities and the taxpayer, as evidence suggests that more people have been forced into expensive temporary accommodation. Can the noble Viscount tell the House what assessment the Government have made of this wider cost to the public purse of the LHA freeze?

Investment in social housing is by far the best solution to this crisis. That is the way to ensure that low-income families can have a secure and affordable home to live in, and a better-managed private rented sector would also be good for tenants. Ministers have promised action for years, but what have we seen? Not a lot. All these things would be better for the public purse too. In the meantime, freezing the local housing allowance makes no sense whatever and serves only to make a bad situation worse.

I ask the noble Viscount whether he might like to join me one day and go out to some of the London boroughs to look at the quality of the accommodation we are asking people to live in. As the noble Lord said, people are being asked to live in the most appalling accommodation, so I hope he will join me. The noble Lord, Lord Young of Cookham, came out with me a couple of years ago. It is quite shocking where we expect families to live, so I hope the noble Viscount will accept the invitation to come out with me some day in the next few months. Anyway, I look forward to what he will say in response to this debate.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I start by taking up the offer of the noble Lord, Lord Kennedy. This is a fairly straightforward answer: it is a yes. I would very much appreciate the opportunity to join him and whoever else he might care to bring along to see for myself what is happening. It is very much what I would like to do—genuinely.

I thank the noble Lord, Lord Shipley, for initiating this debate on the Rent Officers (Housing Benefit & Universal Credit Functions) (Modification) Order 2023. This annual legislation informs rent officers in the Valuation Office Agency, the VOA, and rent services in Scotland and Wales of the level at which to set local housing allowance, LHA, rates from April 2023. I also add my voice to those of other noble Lords in wishing the noble Baroness, Lady Thornhill, a speedy recovery from her illness—as the House is aware, the debate was down in her name.

--- Later in debate ---

To conclude, as reaffirmed by both support packages announced in the Spring and Autumn Budgets, the Government are committed to supporting all members of society, in particular low-income households. We recognise that we must continue to provide that support for the most vulnerable in society while balancing it with fairness to the taxpayer, as I said earlier.

[Lord Kennedy of Southwark (Lab Co-op)]

I am glad the noble Viscount mentioned fairness to the taxpayer, as it is not only about the sums of money—our whole point is that the Government are not spending it very wisely. If they looked and listened a bit more, they could spend it more effectively and get better value for money for the taxpayer. It is no good saying that they want to spend money wisely. They are not spending money wisely and that is causing huge grief for people. I do not understand why they will not address that. They need to work across departments, address the issues and spend the money better.

[Viscount Younger of Leckie (Con)]

I absolutely have listened to the noble Lord, but how Governments spend money and whether they spend it wisely is a subjective issue wherever it is spent. We want and need to spend it wisely and on the most vulnerable.

Housing: Pensions and Deposits

Lord Kennedy of Southwark Excerpts

Wednesday 5th June 2019 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty's Government what plans they have to allow individuals to use accrued pension savings to fund first time home deposits.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)]

My Lords, the Government have no plans to change access to accrued pension savings. Automatic enrolment has transformed pension participation, with over 10 million people enrolled in workplace schemes. We will build on these reforms. We are also committed to helping people realise their aspiration to own their own home. Since 2010, over half a million people have been helped to purchase a home through government-backed schemes including Help to Buy.

[Lord Kennedy of Southwark (Lab Co-op)]

When I read about this proposal, I thought it was ill-thought-out and damaging. Does the noble Baroness agree that people need to plan carefully for their retirement, to ensure they have an adequate income? If this idea ever came to fruition, it is likely that it would push up house prices and leave people worse off regarding their expected retirement income.

[Baroness Buscombe]

I entirely agree with the noble Lord that we must think carefully about how we encourage and support people to save for the long term and their retirement. That is why we are so pleased about the success of auto-enrolment. Our priority remains establishing long-term savings behaviour, so that people are enabled to save for greater security. Automatic enrolment has already reversed the decline in workplace pension savings seen in the decade prior to its introduction, and the number of first-time home buyers is at its highest level for 11 years.

Financial Guidance and Claims Bill [HL]

Lord Kennedy of Southwark Excerpts

Committee: 1st sitting (Hansard): House of Lords
Wednesday 19th July 2017 Lords Chamber

[Lord Kennedy of Southwark (Lab)]

I have looked at the amendment and listened carefully to what the Minister said. I agree very much with the comments of the noble Baroness, Lady Coussins. Nothing that the Minister said on Amendment 1 leads me to think that the Government are particularly opposed to these provisions. Is she saying that they are not necessary, or that they will be dealt with elsewhere? They all seem perfectly reasonable points to make, as any sort of future body would want to do these things—to have a business plan, to consult properly and to make sure that it does proper updates and seeks to be informed. Is it the intention that these things in the amendment can be done elsewhere and are not necessary to include at this point, but the Government are not opposed in principle to what the amendment says?

[Baroness Buscombe]

I hope I have understood the noble Lord. Is he suggesting that we should include all of this in the Bill?

[Lord Kennedy of Southwark]

No, I am just trying to clarify for the noble Baroness. Is she saying that, in principle, she sees the points that my noble friend Lord McKenzie is making in the amendment but that she does not think they are necessary to include at this point in the Bill?

[Baroness Buscombe]

I accept what the noble Lord says but I am also saying that what is necessary is already either in the Bill or, as I explained, in the requirements reflected in Her Majesty’s Treasury guidance which apply to all arm’s-length bodies across government. As for other DWP sponsor bodies, those requirements will be written into the framework document that will be developed in the run-up to launch and agreed with the CEO of the body. It will be reviewed regularly thereafter and published by the body.

Homelessness: Housing Benefit

Lord Kennedy of Southwark Excerpts

Thursday 9th March 2017 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the effect on levels of homelessness of the proposal to withdraw Housing Benefit from 18 to 21 year olds.

[Lord Kennedy of Southwark (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I refer noble Lords to my entry in the Register of Lords’ Interests.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)]

My Lords, from 1 April, automatic entitlement to housing costs in universal credit will be removed for some 18 to 21 year-olds. This policy removes a perverse incentive for young adults to leave the family home and pass the cost on to the taxpayer. There is a comprehensive set of exemptions in place for the most vulnerable.

[Lord Kennedy of Southwark]

Last week, the Government made the announcement about the withdrawal of housing benefit from 18 to 21 year-olds. On the previous Friday in this Chamber, they supported the Homelessness Reduction Bill and said that they had identified money for that purpose. Does the noble Lord not see the absurdity and hypocrisy of those two decisions? Does he agree with the comments of the Member for Enfield Southgate in the other place, who described the decision to withdraw these benefits from 18 to 21 year-olds as “catastrophic”?

[Lord Henley]

My Lords, I simply do not accept the point that the noble Lord makes. Yes, we supported that Bill and will support it again tomorrow, when I think it will have its Committee stage in this House. We will continue to do so and we will continue to protect the most vulnerable in relation to housing. But we also wish to make sure that young people do not slip into a life on benefits. That is what this change is about.

Health and Safety at Work etc. Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015

Lord Kennedy of Southwark Excerpts

Wednesday 22nd July 2015 Lords Chamber

[Lord Cormack (Con)]

My Lords, it is very clear from what the noble Baroness has said that the health and safety of the English language are at risk. I should like an assurance from my noble friend that the word “probabilistic” will never appear again in any document or on the Floor of this House. I should like an assurance that she will take some time during the Recess to distribute to everyone within her department a copy of Sir Ernest Gowers’ Plain Words. May we also have a resolution that, when we come back in the autumn, acronyms will be banned?

[Lord Kennedy of Southwark (Lab)]

My Lords, I agree entirely with the comments of my noble friend Baroness Donaghy. She is absolutely right to raise her concerns. I also want to raise the question of the agriculture industry. I know that this industry is prescribed; it is the most dangerous industry working today. There is a shocking level of drownings, electrocutions and other fatalities in this industry. It has a really appalling record. I hope the noble Baroness can comment on that today because it really is an industry in which a lot of individuals work and in which some very serious injuries take place. Frankly, the regulations at present are not good enough or strong enough, and need strengthening in that industry.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the noble Baroness, Lady Altmann, for introducing these regulations. I welcome her to what I understand to be her first foray into the health and safety debate. The Minister will doubtless be aware of the extensive legislative consideration given to this matter in what was then the Deregulation Bill—now the Act—which culminated in the provision now enabling these regulations.

As we heard, these changes to the Health and Safety at Work etc. Act 1974 have their origin in the report of Professor Löfstedt entitled Reclaiming Health and Safety for All, in which he recommended that those self-employed people whose activities posed no potential risk of harm to others should be exempt from the general duties under that Act. This recommendation was made, notwithstanding that it was generally acknowledged, included by the professor himself, that these duties did not overly burden the self-employed, and that any requirements in these circumstances would be minimal in time, cost and enforcement effort by the HSE and local authorities. Their main duty was to carry out an assessment of the risks to themselves and others that are relevant to their work. There was no necessity to record the findings. The impact assessment that accompanies the regulations estimates that those within the provisions would have spent on average just 15 minutes a year on this endeavour. Paragraph 58 of the impact assessment further states:

“One current requirement that the self-employed might not comply with if they became exempt is carrying out a risk assessment considering risk to themselves. However, in order to know whether they qualify for the exemption, they would still need to assess whether their work poses risk to others, and it is likely that any risks to themselves would arise from the same factors”.

So there is no particular practical easement from that perspective.

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[Baroness Altmann]

I thank my noble friend Lord Hodgson for his comments. I would certainly be of the view that in the cases one could imagine these regulations applying to, it would be common sense to identify whether you pose no risk to the public in the work you are doing. You would therefore not need to carry out a health and safety assessment on yourself or your place of work if you do not pose any risk to anybody else. As I have said, a self-employed person who is an employer will continue to have duties under the Act; so will anyone who carries out high-risk activities.

[Lord Kennedy of Southwark]

I made reference to the problems in the agriculture industry, which is the most dangerous in which to work in the whole of the UK. I am certainly of the opinion that either the regulations are not strong enough at present or they are not enforced properly. Will the noble Baroness look at the list of injuries—drownings and electrocutions? It is a shocking tale in that industry and something really needs to be done about it.

Unemployment: Young People

Lord Kennedy of Southwark Excerpts

Tuesday 28th October 2014 Lords Chamber

[Lord Freud]

The fundamental driver of these much sunnier figures is clearly our economy, which is now the fastest growing of the major economies. It is vital that we keep that process going. It is also vital that we have a benefits system that encourages and enables people to go into the workforce rather than being blocked from going into it.

[Lord Kennedy of Southwark (Lab)]

My Lords, any reduction in unemployment is to be welcomed, particularly youth unemployment. Can the noble Lord tell the House how many of those new jobs are part of the 5.2 million people on low pay in this country? Low pay is now a huge problem for us to deal with.

[Lord Freud]

The Governor of the Bank of England has said that the only way that we are going to get growth in real wages is by recovering productivity in the economy. One way is clearly to reduce dependency and to get 1.7 million extra people into work. The second way is to get the skills base up, and there are now some really good signs that we are moving that up by serious percentage points. The third way is progression in work, so that people earn more. That is what universal credit is all about.

Credit Unions

Lord Kennedy of Southwark Excerpts

Thursday 13th December 2012 Lords Chamber

Moved By

[Lord Kennedy of Southwark]

That this House takes note of the development of credit unions in the United Kingdom.

[Lord Kennedy of Southwark]

My Lords, I am delighted to open this debate on the development of credit unions in the United Kingdom. I have been a supporter of the credit union movement for well over 25 years. Since coming to the House two and a half years ago, I have tried to raise the profile of credit unions and to campaign for positive reform that will enable the movement to grow and to better serve its members. I firmly believe that a vibrant credit union sector is vital as part of the landscape of different financial organisations offering a range of financial products to citizens. I am a member of the Rainbow Savers credit union and have been for many years. I am also one of the vice-chairs of the All-Party Parliamentary Group on Credit Unions. Credit unions are financial co-operatives. I am delighted that in addition to being a Labour Party member, I sit in this House as a member of the Co-operative Party and as one of the 18 Labour and Co-operative Peers.

It is estimated that more than 90% of the UK population are eligible to join a credit union, either because of where they live or the industry in which they work. I am delighted that there is cross-party support in this House and in the other place for the development of credit unions—as there is in the devolved institutions, town halls and council chambers across the United Kingdom. More than 1 million people in Great Britain use credit unions. In June this year, credit unions held savings for their members amounting to £776 million and had £602 million out on loan to members.

In recent years, growth has been impressive. The previous Labour Government and the present coalition Government have both been supportive of the movement. The average membership of a credit union has increased from 200 members in the 1990s to more than 2,000 members today. Many of the bigger credit unions, such as Manchester, Glasgow and London Mutual, often get 200 to 300 applications for membership per month.

However, on an international scale credit union membership and penetration into communities here is on a small scale. Much more needs to be done. Compared with the UK’s 1 million members, the Republic of Ireland, which has a much smaller population, has more than 3 million members of credit unions. Two-thirds of the population of the Republic are members of credit unions. They have well over 10 times the amount of members’ money on deposit that we have in the UK. In the United States of America, 93 million citizens—just over 30% of the population—are members of credit unions, which have $845 billion on deposit. I hope that will give noble Lords some idea of where we fit in on the scale, and of what can be done if we work together.

One positive thing that credit unions do is encourage their members to save. Getting into the habit of saving and putting money aside for a rainy day, for Christmas or for something for the home is a good thing to do. It is a good discipline and a good habit to get into, and it will serve people well throughout their life. Credit unions also provide affordable sources of credit to members at a maximum interest rate of 2% per month, or 26.8% per annum. A £300 loan repaid over 26 weeks will cost a member less than £20 in interest. A similar loan from a home credit provider would cost well in excess of £170 in interest—and that is the nub of the problem.

If you are on a low or fixed income you often get the worst possible deal for finance, and all noble Lords should be angry about that. Why is it acceptable that those with the least should have to pay the most for finance? It is an outrage. With all the changes taking place in benefits and welfare, and with the introduction of universal credit, we should all agree that a sustainable fair-price mechanism to enable people to get the finance they need is desperately needed. An expanding credit union movement fits the bill nicely.

As I have said, if the big society initiative means anything, surely it means people coming together to help themselves and their communities. I contend that credit unions are the big society in action. I was delighted last week when we agreed an amendment to the Financial Services Bill that will cap the interest rates and other charges levied by payday lenders such as Wonga. I hope that the days of 4,000% interest rates from payday lenders will soon come to an end.

London Mutual Credit Union entered the payday lending market because it saw that local people had a need for that. People in desperate situations were coming in through its front door. They were drowning in a sea of debt and paying exorbitant interest rates, to unsympathetic companies whose only solution was to offer them another payday loan and rack up interest, charges and fines. People were offered another big loan that then could not be paid, so London Mutual stepped in. Its interest rate is 26.8% per annum, so if you borrow £400 for one month, you pay £8 interest, not the £120 you would pay with some high street payday lenders.

I accept that no credit union will be able to grow and be financially stable on payday lending alone. The London Mutual added this facility to a suite of products it offers to its members because it saw that there was a desperate need for it as people were being ripped off. Credit unions need to grow and prosper. That cannot be done just through government schemes and grants. They have to grow by attracting new members and savings and building their business on solid foundations. Credit unions must also be attractive to a wide cross-section of the population. They cannot be just institutions where poor people go for finance because no one else will give them any finance. Therefore, credit unions have to have a suite of products. Many of the large ones offer ISAs to their members at very competitive interest rates. Five of the biggest credit unions in the UK now offer mortgages to their members. Credit unions should offer traditional savings and lending, where possible and, where there is a need, look to provide short-term finance in addition to other financial products such as ISAs and much longer-term loans and mortgages where their financial strength allows. The movement should work towards providing financial services that are needed and wanted but do so on a firm footing with a strong financial base and using best business practice to achieve that. The challenge is for the Government, banks, business in general and local authorities all to play their role in supporting the industry to enable credit unions to grow their financial strength and robustness and deliver for their members reasonably priced financial products and services.

What should we be doing? The Government and Parliament need to ensure that the legislative framework in which the credit union sector operates is modern, up to date, flexible and enables it to develop and meet the challenges and take up the opportunities offered by the modern world. A start was made with the passing of the legislative reform order early this year but much more needs to be done. The DWP expansion project is a good government initiative and up to £35.6 million is available to credit union consortia. The aim of the project is to increase membership of credit unions by half a million by March 2015 and a million by March 2017, and increase access to affordable credit so that members save an additional £1 billion in interest payments compared with what they would have paid to high-cost commercial lenders between the start of the project and when it ends in 2019.

The Government should also ensure that the link-up with the Post Office happens. It would be good for the Post Office, develop the back office functions and give every credit union in the country a counter service at every post office, which is a trusted brand and presence on virtually every high street. This link has the potential really to boost confidence in the sector and create expansion.

We have on many occasions in this House spoken about banks and how these financial institutions have let us down. Not all but many banks do indeed have to earn the trust of their customers and the nation at large. Their practices have not been acceptable and people have rightly been cross at their actions. Many banks do some work in the field of credit unions by sponsoring events, reports and activities and some bank staff do a few hours’ work with a local credit union. While this is commendable and welcome, the banks have to do much more. If there are people in the community to whom banks do not want to provide financial products for whatever reason, they have a responsibility to enable the credit union sector to provide those services to people.

I would like to see all the banks—Barclays, HSBC, NatWest, Lloyds TSB and the Co-operative Bank—agree to second staff to work in credit unions. This would not be people just helping out for five hours but the banks identifying bright young people—those who they believe could be running their banks in the years to come and who will have major roles to play—and seconding them to work for credit unions for a year or two as part of their training and development programme. They could help build capacity, improve the management, practices and procedures, and build the robustness of the credit unions to provide financial products to those in the local community to whom the banks do not wish to provide financial services. This is socially responsible and I believe that the banks have a duty to put much more back into the community.

Local authorities have an important role to play in promoting credit unions to their residents. There are excellent examples of partnership working that are a real benefit to the local population and the local economy. Salford University did some research on behalf of Leeds City Council. It found that for every pound invested in credit unions there was a £10 benefit in retained income for the local economy as money was not lost in interest payments. Islington Council automatically signs up every new council tenant with the local credit union. It opens an account for them and puts £2 in it. Southwark, the borough in which I grew up, also works very closely with the London Mutual and actively promotes its services. Glasgow City Council deserves particular praise for the work it does—with its active support and engagement it has the largest credit union membership of any city in the UK. Some 22% of the population of the city of Glasgow are members of credit unions. The work in Glasgow was targeted to overcome organisational barriers to growth and to help the credit unions to become self-sufficient and standing on their own two feet. This is where we have to seek to go. I would like to see the Local Government Association and CoSLA actively encouraging their members to be fully engaged with, and supportive of, credit unions, playing a leading role in ensuring that credit unions in their areas have active agreements and active plans for growth and capacity building.

The social housing sector has also seen the potential for credit unions helping people with the transition to universal credits with jam-jar and ring-fenced accounts for regular outgoings, paying the rent to the landlord before releasing the remainder to the tenant. This has to be an area for further expansion with housing providers working in partnership so it is better for the tenants, the housing provider and the credit union and the work it is seeking to do.

There is also a role for employers to work with credit unions and there are some excellent examples, but quite a lot of them appear to be in the public sector. The private sector should look to engage more as there are real benefits for companies, their staff and local communities with minimal cost on their part.

As I bring my remarks to a close, I am delighted that my noble friend Lord Collins and the noble Lord, Lord Freud, will respond for the Opposition and the Government respectively. I thank all noble Lords and the right reverend Prelate who are going to speak today and look forward to their contributions.

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[Lord Kennedy of Southwark]

My Lords, I thank all noble Lords and the right reverend Prelate for their contributions. It is encouraging that there is so much support across the House. I very much endorse the remarks of many noble Lords about putting the personal back into banking and getting the retail banking sector to step up to the mark. Not having access to bank accounts leaves people at the hands of high-cost payday lenders. This is a huge problem that has to be addressed. Getting the balance right between regulation and enterprise is so important to create the conditions for the sector to prosper. Many noble Lords spoke about the importance of ensuring that the credit unions have the management and professional governance structures in place. I fully support what was said.

We have to be ambitious for the movement and for the sector. I hope the Government will reflect on the debate and see the credit union movement as a key component in the financial marketplace. While some banks have provided support, I was delighted that many noble Lords supported my call for them to do more.

In conclusion, I thank all noble Lords for their contributions. I can assure all noble Lords that the development of credit unions is a matter I will return to again and again in this House. The noble Lord, Lord Cormack, said the banks could and should do more. It is our job to make sure the banks respond to that challenge as, “Yes, we will do more.”.

Motion agreed.

Education: Conservatoires

Lord Kennedy of Southwark Excerpts

Wednesday 10th October 2012 Lords Chamber

[Lord Kennedy of Southwark]

My Lords, I, too, thank my noble friend Lord Lipsey for initiating this important debate in your Lordships’ House tonight. I knew of my noble friend before I entered this House, but I did not have the privilege of meeting and getting to know him until I was a Member. We have found that we agree on a number of diverse issues, and it is always a pleasure to be in his company.

While I was at school, I learnt to play the bassoon. I can advise your Lordships’ House that I was a very average player, but I am immensely grateful to my school, the former Inner London Education Authority and the Centre for Young Musicians for the help, support and encouragement they gave me and my fellow pupils. One or two of my fellow pupils got the opportunity to study at our conservatoires, and it is vital that the Government meet the funding needs of these centres of excellence.

The United Kingdom is seen as a centre of excellence in music. We not only produce from our own citizens some of the finest musicians in the world, but some of the finest musicians in the world come here to study because of our centres of excellence. It is not measured in fee income from home or abroad but in our influence, the vibrancy of our cultural scene and that in each of the nations in the United Kingdom, world-class concerts, events and productions of a staggering variety are taking place every day which people from all parts of the United Kingdom pay to enjoy. Tourists from all around the world come here because of the reputation, quality and variety of concerts and other productions. For relatively modest sums, the payback is measured in billions of pounds, thousands of jobs and the wonderfully creative things that we all enjoy and benefit from.

So I want the noble Viscount, Lord Younger of Leckie, to be a champion for our conservatoires and to make the case for exceptional funding. We have been the shop window of the world this year, with the Olympic and Paralympic Games and the Diamond Jubilee of Her Majesty. It would be a tragedy if this was put at risk by short-term, blinkered actions by the Government that have not been thought through.

Credit Unions

Lord Kennedy of Southwark Excerpts

Thursday 19th July 2012 Lords Chamber

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what are the next actions they plan to take in support of the continuing development of credit unions.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, credit unions provide people on low income with access to financial services and loans. More can be done to support credit unions to modernise, serve more people and become self-sustainable. Therefore, on 27 June, I announced that we are going to provide £38 million to fund a new credit union expansion project and that the Government will be consulting on credit union interest rates, as recommended in the credit union feasibility study published on 10 May.

[Lord Kennedy of Southwark]

My Lords, in the UK today, 1.4 million people have no bank account and 7 million people use high-cost credit, whether it is payday loans, home credit or pawnbrokers. My frustration is that development is still very slow and more could be done to develop the sector. Will the Minister agree to look at what contribution the high street banks could make towards developing the sector? In particular, could they be persuaded to second staff to work in the sector to aid its development? I believe that our banks should make a contribution to the sector to provide financial products at an affordable cost that they themselves will not provide.

[Lord Freud]

My Lords, we have a procurement function going on with the credit unions, which will start shortly, in terms of how they can modernise and improve. It may well be that there are contributions that are not financial but intellectual that the credit unions can add. We are currently having a series of working parties with the retail banks as we develop the requirements for universal credit and financial inclusion.