Tackling Financial Exclusion (Financial Exclusion Report)

Lord Shinkwin Excerpts

Monday 18th December 2017 Lords Chamber

[Lord Shinkwin (Con)]

My Lords, it was a pleasure to serve under the chairmanship of the noble Baroness, Lady Tyler of Enfield, and I too pay tribute to the excellent leadership she gave the committee—which also received, as we have already heard, superb support from the committee clerk, his team and the committee’s advisers.

I want to focus my remarks on two specific recommendations of the report. First, recommendation 5 calls for the introduction of a requirement for the Financial Conduct Authority—the FCA—to make rules setting out a reasonable duty of care for financial services providers to exercise towards their customers. As my noble friend Lord Holmes of Richmond, who made an excellent speech, and other noble Lords have already mentioned, the Select Committee believes that such a duty will promote responsible behaviour on the part of business and support sound financial decision-making by customers.

In their response to the committee’s report, the Government highlighted that the FCA has committed to publishing a discussion paper on the introduction of a duty of care and suggested that this was a sufficient next step. The problem, as has already been said, is that the discussion paper—which would only, in the FCA’s own words, “start a dialogue”—is not due to be published until after the UK’s withdrawal from the EU. I therefore wonder whether my noble friend the Minister can explain why we need to wait until after Brexit given that the Financial Guidance and Claims Bill, now in the other place, offers a timely opportunity to make the necessary amendments to the Financial Services and Markets Act 2000. Moreover, will he say what he thinks “after Brexit” actually means? Is that March 2019 or March 2021, after the two-year transition period? Most importantly, quite apart from the fact that a duty of care amendment would secure better outcomes for consumers in general, what is his view of the justification for the unnecessary and, some would say, unacceptable delay to customers affected by cancer accessing better support at their time of greatest need?

I should declare an interest of sorts. I was privileged to work at Macmillan Cancer Support 15 or so years ago. Never did I imagine that I would have the privilege of speaking in support of that amazing charity as a Member of your Lordships’ House, but I am proud to do so today, and to support the one in two people who, by 2020, as we have already heard, will get that illness in their lifetime. Alongside the physical and emotional impacts, cancer brings with it a real risk of financial hardship: four out of five people with cancer are, on average, £570 a month worse off as a result of their diagnosis.

As providers of mortgages and other financial products, banks have an unrivalled ability to support people affected by this financial impact; yet notwithstanding some progress, there is still a lack of consistency across the sector, and people still do not know what to expect from their bank. Macmillan research found that only one in nine people with cancer had even told their bank about their diagnosis, and of those who did tell their bank, almost one-quarter were dissatisfied with the support they received. If banks and building societies had a legal duty of care towards their customers, it would give people with cancer confidence to disclose their diagnosis, knowing that they could trust their bank to act in their best interests. For banks, this would mean being ready to respond to their customers’ needs and designing the vital products and services that would help people manage their finances while ill.

Macmillan is very concerned that unless the Government legislate for the duty of care now, the issue will be delayed indefinitely. Sadly, as so many of us know all too well, cancer takes no account of such delays. When cancer strikes, the need is now. The Government and the FCA need to recognise that and act now, not in some far-off future.

I turn briefly to recommendation 10 and the duty to make reasonable adjustments—which too often, incredibly, is still not being met. As we have already heard, the committee called for a review, to be published within 18 months of the report’s publication, of reasonable adjustment practices for disabled people, to identify areas of good and bad practice so that improvements can be made. That needs to be followed, the committee said, by a timetable with clear target dates for the delivery of improvements, along with their monitoring and implementation within the lifetime of this Parliament.

Here is an opportunity for the Government to champion the disabled consumer and disability equality in general. Yet, sadly, they seem to decline to lead or to set the pace. I have to ask what message this sends to disabled people. The FCA does not appear that bothered either. A word search of its consumer approach document, published only last month, generated one reference to disability, and none to reasonable adjustments. So although the practical problems which disabled consumers like me face are highlighted in the committee’s report, the full extent of the cultural problem we still encounter is actually highlighted by its omission from the FCA document itself. Ultimately, this comes down to enforcement. Put simply, enforceability and disability are inextricably linked: the duty’s enforceability is essential to enabling a person with a disability to access services which a non-disabled person takes for granted. Yet our power to enforce has gradually been eroded. This needs to be reversed.

Cumulative impact assessments are apparently all the rage, and in conclusion I have one of my own, although it is unfortunately not that positive. I fear that the cumulative impact of the Government’s passivity on disability equality is storing up problems which as well as being unnecessary, are completely avoidable—if only they would take a lead and put disability equality back on their agenda. In order for a commitment to building a country that works for everyone to be credible, it must include everyone, whether they are affected by cancer or by disability. I hope very much that Ministers will use the coming recess to reflect on how this can be done in a strategic and concerted way across government, as a matter of urgency.