The Economy

Yvonne Fovargue Excerpts

Thursday 24th October 2019 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

The Queen’s Speech had nothing to say about debt but, unfortunately, debt continues to blight millions of our citizens, and the situation is getting worse. Nearly a third of people expect their finances to worsen in the next year, with only 14% expecting their situation to improve. The number of people saving is dropping, with a quarter of British adults having no savings at all. I am pleased that the Government have committed to breathing space, even though it will only come in in 2021, but what about the other plank in that strategy: statutory debt repayment plans? They will need primary legislation, and I was surprised to see no plan for that in the Queen’s Speech.

In the meantime, the Government can do much more to help those who have fallen into problem debt. We need increased funding for debt advice. I am not just talking about public money; I am talking about initiatives such as the Financial Conduct Authority’s levy on lenders and the “fair share” scheme. The banks are simply not paying enough, and the utility companies are not stepping up to the plate by joining the scheme. It is great to have policies for vulnerable customers and to try to prevent debt, but people will fall into debt because they lose their job or become sick. If organisations will not act voluntarily, there is a strong case to compel them, and Her Majesty’s Treasury should take note.

The Government also have an important role to play in reducing debt by overhauling their own debt collection practices, particularly the use of bailiffs. At the very least, we need an independent regulator of bailiffs and a commitment to use a fairer and more enlightened form of debt collection that puts the ability to pay first. The Government should also look at the policies that are helping to create debt in the first place, such as the freezing of benefits since April 2016 and the five-week wait for universal credit claims. Some 49% of benefit claimants affected by the freeze have struggled to meet essential costs, and many are using food banks. The Government should end the freeze and reduce the five-week wait by bringing forward the first non-repayable payment to no later than two weeks into a universal credit claim.

Another struggling group are the 1950s-born women. They did the right thing. They worked; they brought up their children, and many looked after elderly relatives, but they have been hit by successive rises to the pension age. The women who had just 18 months’ notice under the Pensions Act 2011 were particularly hard hit, so it is of no surprise that many of them tell me that they are falling into debt or using food banks. They are angry, and rightly so, that their great contribution has been of so little value to this Government.

I commend St John Rigby College, Winstanley College and Wigan and Leigh College, which take students from across my constituency. They have struggled with underfunding for many years, but they continue to provide an excellent education for young people. It is time to raise the rate.

Older people, families and young people are all struggling. Few have any confidence that their finances will improve. There is much this Government could have done not just to improve the safety net when people need a little help but to ensure that the safety net is needed less and less.

Financial Exclusion: Access to Cash

Yvonne Fovargue Excerpts

Tuesday 21st May 2019 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Henry. I congratulate my hon. Friend the Member for Feltham and Heston (Seema Malhotra) on securing this debate. It might seem counter-intuitive to suggest that access to cash is vital for financial inclusion, because everyone says the future is in FinTech, but my local authority did a survey two years ago to see how many people in Wigan use the internet regularly, and it found that 30% have never even accessed the internet. That is below the national average. Many who do not access the internet are on lower than average incomes or are disabled or old. Some 93% of those over 80 have never used internet banking, and we need to think about those people when we promote digital by default. It does not have be online and cashless.

Clearly those without internet access cannot bank online, but with the pace of bank closures, neither are they able to do it face to face. Not only are the physical branches going, but the ATMs are going, too. In Wigan, we lost one in nine cash machines in less than two years. Yes, that is the cashless society, but many prefer to use cash, particularly those on low incomes. If their income is tight, they need to be able to check every penny that passes through their hands, and cash is a tangible asset. People cannot go overdrawn with the money in their purse.

It is not just a few people who say it is important to have that access. A survey of more than 1,200 Which? members found four in five saying that access to the free-to-use network was important to their daily lives and for paying for goods and services. It found that removing free-to-use access would leave one in 10 struggling to make payments. We therefore have to question the closure of so many ATMs and bank branches. As the hon. Member for Angus (Kirstene Hair) said, we also need to ensure that shops and businesses remain cash-friendly and customers are not forced into paying by card.

There are many issues with paying by card. People do not always trust online transactions, and I congratulate the TSB on its fraud repay scheme, which creates more trust in financial services. Access to banking and financial services is at the heart of the inclusion and exclusion debate. We need to be careful not to be drawn into saying that FinTech will be a universal panacea. It is vital that consumers have the freedom to pay for goods and services however they choose. If we sleepwalk into becoming a cashless society, it will have grave consequences for our most vulnerable people. I am not anti-technology; we need to encourage people to face the future and to embrace the advantages of technology, but we should not run before we can walk. For the foreseeable future, cash and digital have to exist side by side and as complementary tools in increasing inclusion and improving people’s lives.

Debt Collection Letters

Yvonne Fovargue Excerpts

Tuesday 21st May 2019 Westminster Hall

[Norman Lamb]

The hon. Gentleman goes to the heart of what I am proposing. I will expand on the point he made.

Debt collection letters, like the ones received by Paul and Jerome, often include complex text, which is capitalised and put in bold. The language can be intimidating to someone experiencing mental ill health. The letters often start with threats of court action. They do contain advice—the purpose is well meaning in terms of the legislative requirements.

However, the wording they are required to use is inaccurate and out of date. It was devised before free debt advice was widely available. Recipients are told to get help from a solicitor, from their local trading standards department or a citizens advice bureau. However, trading standards can only help someone when a company’s behaviour is illegal, not in an ordinary civil situation. Therefore, that advice, in wording required by the Government, is inaccurate and should not be there.

The idea that someone in problem debt should be told in official advice to seek out a solicitor is outdated and frankly ridiculous for many people who would just assume that going to a solicitor is impossible, due to the cost involved. The advice is so out of date because, outrageously, the content of these letters is dictated by legislation that has not been updated for decades. Lenders are legally obliged to include certain pieces of prescribed content, as is laid out in the Consumer Credit Act 1974 and the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983.

The Money and Mental Health Policy Institute’s “Stop the #DebtThreats” campaign calls on the Government to amend the Consumer Credit Act and the associated regulations, to put a stop to the threatening letters. First, the Government should change the prescribed content of lenders’ letters, exactly as the hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) suggested. The Government should make these letters more accessible, easier to understand and clearer for people in problem debt.

If the Minister is tempted to say that he is supportive of the principle involved here, but it involves a comprehensive review of the Consumer Credit Act and the whole thing will take a long time, I do not buy it. There is clearly a case for a review of the primary legislation, but the wording of the letter, which is out of date and inappropriate, could be changed quickly through regulations. There is a real danger that we overcomplicate this. Those regulations could be made in a straightforward way quickly, pending a wider review of how we deal with these issues. One sensible idea is to refer the matter across to the Financial Conduct Authority. The step could be taken immediately to get rid of the inappropriate and inaccurate prescribed wording, which simply should not be there and makes things more difficult for people.

[Yvonne Fovargue (Makerfield) (Lab)]

Does the right hon. Gentleman agree that putting the threat of court action first puts people off reading the rest of the letter? What should be first is the fact that help is available for people to get debt advice, and that it does not have to be face to face—advice is available online and on the telephone. There is a wide range of support that was not there before, which needs to be highlighted.

[Norman Lamb]

The hon. Lady is absolutely right. The guidance we had from organisations before the debate makes the point that the letters are often lengthy. People in a state of anxiety and distress will give up reading something complex before they reach the helpful advice, which might be right at the end. There needs to be clear information up front about seeking advice. It is in the interest of the creditor to refer people to that advice straightaway and put it up front, and the Government’s prescribed wording could require that, which is what we are calling for.

There is also a danger that the Minister might say, “People nowadays can just google it and get access to good advice online,” but when people google for debt advice, the options at the top of the list are for paid-for advice, which is inappropriate. The information that people need should be in the prescribed wording of the letters that creditors have to send. The Government could do something about that quickly.

The Government should stipulate that creditors should signpost people to sources of support, which is really important, as the hon. Member for Makerfield (Yvonne Fovargue) said. People should be directed to the free specialist debt advice provided by charities such as StepChange and Citizens Advice. Exactly as she said, that should be at the start of the letter and should take precedence over threats of court action. Jerome’s mother Tracey and Paul are backing the “Stop the #DebtThreats” campaign.

Last week, the Treasury Committee made a welcome intervention in its report “Consumers’ access to financial services”, which recommended that the Government amend the relevant legislation and reform the content of debt collection letters. It also recommended that debt collection letters contain

“a form of words that would be clear and understandable for an individual with a low level of literacy”,

and that the Government

“mandate the inclusion—with equal prominence to the demand for payment—of information within such requests of how an individual can seek help with their debts.”

The pressure on the Treasury is mounting and we hope that there will be a constructive response. We are calling on the Government to amend the legislation and regulations that govern the content of debt letters. As I said earlier, they should do what is necessary, which they can do quickly by making the wording on the letters more helpful and by getting rid of the inappropriate and inaccurate wording, and then look to wider reform later.

As I indicated, another way to achieve change in the longer run would be to delegate the control of debt letter content requirements to the Financial Conduct Authority. There is an opportunity here, as the FCA recently completed a statutory review of the Consumer Credit Act, which acknowledged several concerns about the rules on content. The review highlighted the possibility of the FCA taking control of and updating the rules. I will be interested to hear the Minister’s response to that suggestion.

Debt collection letters from lenders are just one of many problems that people in financial difficulties face. I also support an initiative that proposes bailiff regulation, which has been put together by the hon. Member for Leeds West (Rachel Reeves). We and other hon. Members have signed a joint letter to the Minister with responsibility for bailiffs to call for the behaviour of bailiffs to be regulated.

The behaviour of bailiffs is another key problem for people in debt, as Jerome Rogers experienced. According to Citizens Advice, more than 100,000 people have had bailiff-related problems in the last 12 months, which is an increase of 16% from the previous year. Some 40% of Citizens Advice clients with issues about bailiffs also had some sort of health condition, including mental ill health, but they often faced completely inappropriate behaviour by bailiffs. In its briefing for the debate, Citizens Advice highlights a number of highly inappropriate actions by bailiffs that have come to its attention.

The argument is that there needs to be a regulator for bailiffs, alongside reform to the wording of the letters. We believe that the Minister can act quickly and I hope that he will give a constructive response.

--- Later in debate ---

[John Glen]

The hon. Gentleman makes a reasonable point, and that is something we need to examine carefully when we consider what needs to happen in this area. I thank the hon. Gentleman for his intervention.

Stakeholder views will be essential to inform the Government’s decision making, and I would welcome the opportunity to meet the right hon. Member for North Norfolk and any other interested colleagues across the House to better understand how this important issue should be addressed as our policy thinking progresses. During my time in office, I have encountered many individuals who have been in financially vulnerable circumstances and I have compassion for the unique challenges they face. Indeed, only last week I welcomed to the Treasury some individuals with lived experience of financial difficulty, to hear in more detail how they had got into those situations.

I would like to take this opportunity to assure the right hon. Member for North Norfolk that reviewing the mental health aspect of the prescribed content in debt collection letters will be top of my list of priorities during this programme of work. The issue requires continued dialogue to understand what the best outcome for these vulnerable individuals would be, and how best to deliver it. Given the letter’s rather terse words referring to a solicitor, which are really not appropriate and could have been written a long time ago, I will reflect on the right hon. Gentleman’s point about the changing nature of debt advice and about how best it can be presented.

That does not mean that those most at risk will not see benefit in the near future. I draw attention to the significant work that has been undertaken to meet the Government’s manifesto commitment of implementing a breathing space scheme, which I alluded to earlier. The scheme will give the most vulnerable consumers 60 days of respite from creditor action, to access debt advice and put their finances on a sustainable footing.

[Yvonne Fovargue]

Can the Minister confirm that the breathing space would also apply to statutory authorities, for example local authorities, which are possibly the biggest users of bailiffs?

[John Glen]

I will come on to that point in a few moments, but my instinct, as I think the hon. Lady knows from my visit to the all-party parliamentary group on debt and personal finance, is that if the breathing space does not contain the maximum amount of public sector debt it will not be meaningful. At this moment, however, I cannot formally confirm how the scheme will work, but I will say a few more things in a few minutes.

The Government set out the detailed policy for the breathing space scheme in a consultation launched in October 2018. As part of the scheme, firms will not be able to communicate directly with consumers to request repayment of debt. In particular, the consultation paper set out the design of an alternative access mechanism for those in mental health crisis. The mechanism would enable those individuals to enter breathing space without having directly accessed debt advice. I feel very strongly about the mechanism, as those suffering from a mental health crisis may find it particularly difficult to engage with debt advice services in the way that people without mental health challenges do.

The consultation closed in January 2019, and the Government will shortly publish a response to set out their approach to the whole scheme, before laying regulations to implement breathing space before the end of the year, which is when a comprehensive answer to the question asked by the hon. Member for Makerfield (Yvonne Fovargue) will be provided.

In conclusion, I share the concerns raised by the right hon. Member for North Norfolk and recognise that, in certain cases, the content of debt collection letters can increase consumer harm. I hope I have assured him that the issue will be at the top of my list of priorities when considering further reform in the consumer credit regulatory framework. I take the point about whether the letter issue can be expedited separately, and I look forward to working with the right hon. Gentleman to better understand the most timely and effective way of remedying the problem. I thank him very much for bringing the matter to the House.

Question put and agreed to.

Communities: Charities and Volunteers

Yvonne Fovargue Excerpts

Wednesday 13th February 2019 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

I am really pleased to speak in this debate and to talk about my experience of 23 years both as a volunteer at and manager of a local citizens advice bureau. People volunteer for many different reasons. I volunteered because I was at home with a young baby, and I wanted to get out and do something else other than sing “The Wheels on the Bus” for a while. I was really glad I did, because when I was left alone with that baby, I realised that CAB was in my blood and I wanted to stay there, and I got a paid job there.

Volunteers include young people looking for work or people who are retired. There are many different roles within even one charity, with many different demands—advice, reception, admin, media, specialisms, social policy and trustees—and it is the job of the manager or the volunteer co-ordinator to ensure that everyone is in the right role and that they are trained, supervised and reviewed to check that we meet their aims and that they meet the organisation’s aims. They are perhaps even given targets for improvement and sometimes even brought to recognise that they are perhaps no longer in the right place and could move on. It is obvious that volunteers take considerable management to provide a service within the charity’s aims. Volunteers give their time freely; they are not free.

We had 50 volunteers and 29 paid staff working full time, with a full-time volunteer co-ordinator, as well as the chief executive officer and deputy. Volunteers do a great job. They have a real stake in their organisation, but sometimes, as demands change, they need taking through the change process. This perhaps needs someone to take them through the process differently than they would with paid staff. I would never have wanted to change to having all paid staff. There is a value in the diversity of volunteers—there are people who are rooted in their communities, who really want to give their time. Sometimes I used to find that people wanted me to give far too much time, wanting me to stay till 7 o’clock every night when my daughter needed putting to bed, but that was my problem.

There have been changes in the charity environment. Many charities now have to be business-focused, particularly those providing public services, and they are moving to having contracts, not grants. I think that is a good thing, as long as the key performance indicators are right and are not just focused on outputs, and the charity looks at its charitable objectives and does not just go for anything. That is where the trustee board comes in. There is a need for a mix of specialist and local skills in accounting, business planning, and grievance and disciplinary procedures. As charities grow, they need to regularly reassess their trustee board, just as much as their management. They need to check that it has the skills to manage the chief executive—I have to say that as a chief exec, that was not always an easy job.

Citizens Advice is a shining example of a charity that uses the experience gained on the ground in local communities to try to effect national change through social policy work. We see the unintended effect of legislation and must be able to speak out. That is not party political—heaven knows, I have criticised every Government since 1986.

I want to move on to my local community and the charities there. Not all charities need to be big; many start from local need. I will mention a couple. Embrace is a user-led charity for people with disabilities. To me, that exemplifies the importance of users being involved and empowering people. It is about asking, “What do they want?” rather than asking them just to take what they are given. There is also the Abram Ward community co-operative, which has projects combating loneliness by bringing young and old together to make items such as go-carts. Wigan Council has a deal whereby it works with charities and community groups and provides small grants and trains volunteers. It has really invigorated the local community so that people feel like a community, not just a collection of individuals who happen to live near one another.

I would not be here today without having volunteered at my local CAB. It led to a career spanning 23 years. That was not my intention when I walked through the door into the manager’s office at Sale CAB. I worked with volunteers and enjoyed and valued their commitment, diversity and humour. I feel that it has really enriched my life, and I hope that it has contributed to improving the lives of those in the local community.

ATM Closures

Yvonne Fovargue Excerpts

Tuesday 4th December 2018 Westminster Hall

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

I beg to move,

That this House has considered the effect of ATM closures on towns, high streets and rural communities.

It is a pleasure to see you in the Chair, Mr Hollobone. I and other hon. Members on both sides of the House have been raising the closure of ATMs and its impact on our towns, high streets and rural communities for some time. The issue is more pressing than ever. In November 2017, LINK, the ATM membership body that sets the funding for free-to-use ATMs, began consulting on proposed cuts to the funding mechanism known as the interchange rate fee—a fee paid to the ATM operator, by the bank or company that issues a consumer’s bank card, when cash is withdrawn. Prior to LINK’s reductions, that fee was 25p. In its consultation, LINK proposed reducing the fee to 20p through four rounds of cuts beginning on 1 July this year and ending in January 2021, although the third cut was cancelled and the fourth has been put under review.

From the beginning, LINK accepted that those changes would lead to ATM closures. In its analysis and consultation documents, it stated that it expected a decline of between 1% and 11% in free-to-use ATMs, but that it was confident that there would be a reduction only in areas with a high concentration of free-to-use ATMs, such as cities. However, the number of closures has been far higher —approximately 250 per month—since LINK announced its consultation. Operators such as NoteMachine and Cardtronics say they expect to lose thousands of machines each, and new installations have been put on hold.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that one of the major problems is that the machine operators—Cardtronics and so on—do not have to inform the LINK network before closing a machine, and that the cost of replacing a machine is prohibitive?

[Ged Killen]

My hon. Friend anticipates my next point. If an ATM is removed, it costs between £7,000 and £10,000 to reinstall. That high capital investment means that, once closed, an ATM is difficult to replace, due to concerns that the investment may not pay off.

LINK sought to reassure the Payment Systems Regulator that the spread of free-to-use ATMs would not be damaged, because it would use its financial inclusion programme to protect ATMs in areas where there was not another free-to-use machine within 1 km. However, although it is well-intentioned and well funded, that programme relies on communities or operators reporting vulnerable ATMs to LINK and nominating them for extra funding, which, as my hon. Friend alluded to, they do not have to do.

The problem is that the existence of the financial inclusion programme is not well communicated, and there is concern that take-up has been poor. Anecdotal evidence suggests that the process for accessing the programme is not well known or straightforward, meaning that communities, operators and councils are often delayed in applying for funding.

I spoke recently to Tesco about its network of more than 4,000 ATMs. As I am sure Members know, many of those ATMs are in groups of two or three outside stores. Tesco told me that in some cases, those two ATMs are the last two in the town, but neither falls under LINK’s financial inclusion programme because both are right beside another free-to-use ATM.

As a consequence of the poor deployment of the financial inclusion programme, more than 100 ATMs with “protected” status have closed. We see examples of the programme failing in Scotland. Just outside Edinburgh, in the EH18 postcode, the nearest free-to-use machine is now 1.3 km away. In the PH24 postcode in the Cairngorms, the nearest machine is 6.6 km away. In TD10 in the Scottish Borders, some consumers must travel 10.9 km to withdraw their cash without charge.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on bringing forward an issue that is important for every one of us here. It is a particularly important issue for me, as I have fought for ATM retention in many places across my constituency, sometimes successfully and sometimes not, mostly due to bank closures. I will use the time available today to do that.

For those who hail from a rural constituency, the availability of free-to-use ATMs is essential. The hon. Gentleman and the hon. Member for Angus (Kirstene Hair) have both outlined the importance of that. In recent times, bank closures have severely affected rural communities, particularly those in my constituency, where I think we have had seven bank closures. I live on the Ards peninsula, and the effect of the closures on the rural community is intense. When the banks close, often no ATMs are retained because the building is sold and there is nowhere to put it, which is very frustrating. My hon. Friend the Member for East Londonderry (Mr Campbell) made a salient point: whenever the banks move out of the villages and toward the town centres, the business moves with them, meaning that villages and small places come under intense pressure.

[Yvonne Fovargue]

Does the hon. Gentleman agree that it is not just bank closures but post office closures that have that effect? Although the closure programme for small post offices has been completed, two post offices in my constituency have closed because the sub-postmasters have resigned and they cannot get anyone else to do it. The Payment Systems Regulator, which told me that cash is available at post offices, has not taken that into account.

Logbook Loans

Yvonne Fovargue Excerpts

Tuesday 12th June 2018 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

I beg to move,

That this House has considered protection from logbook loans.

It is a pleasure to serve under your chairmanship, Sir Edward. I really did not expect to have to bring forward this debate, and it is with regret that I do so.

Until about four weeks ago, a Bill to reform logbook loans was expected in this parliamentary session. It was included in the Queen’s Speech, the Law Commission was tasked with drafting the text and the draft Goods Mortgages Bill was duly published last December. In effect, that was it—we were ready to go. And then the Government pulled the plug. On 14 May, we were told that there would no longer be a Bill and that the matter was to be referred to the Financial Conduct Authority—the FCA—in what looked like a kick into the long grass.

Many of us are nonplussed by the Government’s U-turn. The Bill is largely uncontroversial and will have all-party support. It is undeniable that in their present form logbook loans cause great consumer harm. To say that reform of the loans is long overdue is pretty much an understatement. The case for reform is absolutely overwhelming. Bills of sale—their official title—are governed by two statutes that are dated 1878 and 1882. They were designed in a different age to be used in a different age. They are antiquated and have no part to play in the consumer credit marketplace of the 21st century.

Andrew Bailey, the FCA’s chief executive, recently called them “quaint”. They are a lot more than that: they are downright dangerous. Although they are not a huge part of the high-cost credit market, they affect a really vulnerable group. Citizens Advice, for instance, found that clients with logbook loans had twice as many debts as those without.

Logbook loans are a way for borrowers to use their car or van as security for a loan. The problem for the borrower is that the vehicle becomes the property of the lender until the loan is repaid. If any payments are missed at any time during the agreement, the vehicle can be repossessed without a court order—and that routinely happens, not least because the interest rates are so high. One example from logbookloans.com is that if a customer borrows £850 over 18 months, they will pay flat-rate interest of 132%, with an annual percentage rate, or APR, of 450%. That equates to 18 monthly payments of £140.70, and a total cost of £2,533.

I will give a case study of someone who took out a logbook loan. Sophie lives in Greater Manchester—that is around my area—and she needs her car to get to work. Two years ago, she took out a logbook loan for £2,700, with payments of £688 a month. She kept up with them until recently, when she had to pay a large council tax bill and she fell into arrears. The logbook loan company repossessed her car. She tried to negotiate with the company, but it would not listen. It demanded the total cost of the loan—£7,000—in full and is threatening to add charges. She cannot get to work, as she has no car, and she has a loss of income and the risk of losing her job.

I do not think borrowers always realise what they are letting themselves in for. Many borrowers are desperate. Logbook loans are aimed at people who cannot borrow from anywhere else. They do not fully engage with details of the loan agreement. Frankly, the tone of the advertising is irresponsible. I quote from an online lender, Mobile Money Ltd:

“You could get a same day loan without leaving the house. Try out a loan from the UK’s longest running logbook loan lender. Click ‘Apply Now’.”

To suggest that someone should “Try out a loan” makes it sound more like pizza delivery than a serious lender. Those words are not appropriate.

The other key fact is that logbook loans do not just disadvantage the original lender; unlike any other kind of lending, they can also harm people who are not party to the loan. Someone who buys a car that, unbeknownst to them, is subject to a logbook loan can have it repossessed because the original owner did not keep up repayments. There is nothing they can do about that, even though they bought the car in good faith. It is not even as though they can do a hire purchase investigation check, which can be done with cars bought on hire purchase. That is a real legal loophole.

The Law Commission measure—the Goods Mortgages Bill—would have given borrowers protections similar to those offered by hire purchase law. They would have gained a new right to hand back their car to the lender without being responsible for the remainder of the loan, and there would have been a new requirement for lenders to obtain a court order before seizing goods, provided that the borrower had paid off a third of the loan and had opted in.

Crucially—and this is one of the issues on which the Financial Conduct Authority cannot help—a private individual who bought a vehicle in good faith and without knowing it was subject to a logbook loan would become the owner of the vehicle and not be made liable for the loan. What protection can the FCA offer to an innocent third-party purchaser?

We all agree that it is not a perfect Bill. Some have questioned whether vulnerable customers should have to opt into protection, instead of it being by default. We might ask why protection does not extend to those who have paid off less than one third of the loan, but, taken in the round, the Bill would have been a huge step forward. StepChange, Citizens Advice, the Money Advice Trust—all the agencies said, “It may not be perfect, but it is a huge step forward.”

That brings me to the obvious question: why on earth is the Bill being dropped? Some say it is because of a lack of parliamentary time, but that cannot possibly be the case. Only last week, I spoke on Second Reading of the Non-Domestic Rating (Nursery Grounds) Bill, which irons out an anomaly in the business rate system as it applies to agricultural land. The Minister confirmed in that debate that the anomaly has applied to just a handful of people since it came to light in 2015, yet we had a Government Bill on the Floor of the House to deal with that handful of people.

Logbook loans affect 50,000 people a year, yet we cannot find time for a Bill? What is more, a Law Commission Bill, as the Minister knows, is able to use a special parliamentary procedure that minimises time on the Floor of the House. The procedure is designed to save parliamentary time, so it would be ironic if a lack of it was cited as an excuse not to bring it in.

There must be some other reason. Is the legislation more controversial than expected? If so, how? Could the issues not be dealt with by the parliamentary process? It could be argued, of course, that since the FCA has been undertaking a review of high-cost credit, the matter of logbook loans should sit with the regulator. However, the FCA explicitly declined to include the matter in the recent review, despite the fact that it took on responsibility for regulating logbook loans in 2014. Of course, the FCA knew that the Law Commission was taking on the task of looking at the issue and that many of us have had meetings with the Law Commission about it, and that may have prompted the FCA to shelve the issue. That could be seen as quite reasonable in the circumstances.

Even so, it means that the regulator is on the back foot and that wholesale reform, which is what we need, is years away. I have questioned before and I question again whether the FCA has the powers to deliver the protections that would be enacted by the Goods Mortgages Bill. The consensus is that we need a new statute, and the FCA cannot deliver that. Clearly, the FCA has not prioritised logbook loans, and it needs to do so now.

The FCA could do a number of things. For example, it could impose an interest rate cap and ban top-ups or roll-overs, as it did for payday loans. It could enforce more stringent affordability checks. It could do something about the kind of irresponsible advertising that abounds in the industry, or it could prohibit completely any products that allow for summary repossession. If it plans to do any of those things, it needs to do so quickly.

Frankly, anything the FCA brings forward can only be a sticking plaster—a temporary cover that will not heal the wounds. Outdated legislation, designed for the purchase of hansom cabs and distorted to fit a modern world by unscrupulous lenders, is causing misery for tens of thousands of the most vulnerable consumers every year. I urge the Minister to reconsider and allow the Law Commission Bill to make the progress that was promised in the Queen’s Speech.

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

I am grateful to the hon. Member for Makerfield (Yvonne Fovargue) for raising this issue and for the leadership she has shown on it. She has been following it for some time. The constituents and cases that she has raised are very serious. I am grateful for her involvement in the matter.

Like the hon. Lady, we believe that consumer credit plays an important role in society. It helps individuals spread income and costs over time and cope with unexpected financial shocks. However, it is vital that consumers are treated fairly and that we ensure that their interests are protected, particularly in the case of high-cost products, of which logbook loans are an important example. The hon. Lady set out a number of instances where the costs incurred in some logbook loans are egregious. One would have to question whether individuals should take out such loans.

It is worth pointing out that the number of logbook loans has fallen substantially in recent years. They now make up a very small percentage of the wider high-cost credit market. The total value of outstanding logbook loan debt was less than £100 million in 2016, compared with £2.7 billion of debt from payday loans, doorstep lending, and rent-to-own.

[Yvonne Fovargue]

Does the Minister agree with me and Citizens Advice, who fear that the message being sent by not putting the Bill forward will increase and mainstream logbook lending?

[Robert Jenrick]

I hope I can give some explanation over the course of my remarks as to why we have chosen not to proceed with the Bill at the moment. My opening remarks that the market has shrunk considerably is not to diminish the concerns that the hon. Lady has raised about some of those logbook loans. It is important context to the debate, though, that the market appears to be shrinking, at least for the moment.

The number of bills of sale registered at the High Court has fallen from 52,000 in 2014 to around 35,000 in 2016. That compares with 760,000 people taking out a total of 3.6 million payday loans in 2015 alone. Logbook loans remain an important, if small, part of the loan market and are worthy of attention.

In September 2014, the Government asked the Law Commission to examine the Bills of Sale Acts—the legislation that underpins logbook loans. As the hon. Lady set out, those Acts hark back to a long-distant era. There were concerns over stories of consumer exploitation and high levels of interest, and she has given further examples. Those stories include vehicles being seized too readily on default and unwitting third parties buying a vehicle subject to a logbook loan. All of those things are cause for concern. The Law Commission concluded that the Bills of Sale Acts were out of date and recommended that they should be replaced with a new Goods Mortgages Bill. The Government were sympathetic and agreed that the Law Commission should prepare a draft Bill, which it did, consulting on the draft clauses in the summer of 2017.

Separately, in September 2017, the Government, again showing our good faith and desire to progress the matter, consulted on the aims of the Bill and published the consultation response in May 2018. Although the consultation responses undoubtedly showed a degree of concern about the logbook loan market and broad support for the proposed approach set out in the draft Bill, many stakeholders raised significant concerns, which I will discuss in a moment. Overall, there was less agreement on the detail of the draft Bill than we would normally expect following the Law Commission process, and less than we would wish to see before being ready to proceed with it.

Let me set out a few of the concerns from different stakeholders. Consultees suggested that the draft Bill did not do enough to provide clarity for courts, and expressed concern about its requirement for consumers to opt in to the court process, rather than its being the default. Some consultees also said there needed to be more clarity about the circumstances in which a lender could repossess a secured good without requiring a court order—an important issue, to which the hon. Lady alluded. Other consultees highlighted the risk of borrowers exploiting the protections in the draft Bill for fraudulent purposes.

In addition, a number of consultees argued that the draft Bill could encourage lending to vulnerable consumers by making it easier for consumers to grant security over their goods. Access to credit is obviously an important issue to Members on both sides of the House. The Government are determined to ensure that any legislative changes lead to better outcomes for consumers and do not have unintended consequences.

Having given careful thought to the concerns raised in the consultation, we decided that it was not the right moment to take forward the Bill as currently constituted, and that we wanted to give the matter further consideration. In the light of that decision, the Financial Conduct Authority has decided to look more closely at the logbook loan market, and we welcome that. The FCA will use its supervisory and policy tools to assess whether further action is required, including new rules that are necessary to protect consumers.

The hon. Lady has already set out examples of some of the actions that the FCA could choose to consider, at its discretion. The Government believe that at the moment that is a more proportionate approach, given the declining numbers in the logbook loan market and the concerns that were raised in the consultation about the Bill as currently drafted.

[Yvonne Fovargue]

Could the Minister explicitly say what powers the FCA has to protect innocent consumers who buy cars in good faith, who cannot check anywhere whether they are subject to a logbook loan, and yet who can still have them repossessed?

[Robert Jenrick]

That is one of the matters to which the FCA will need to give careful consideration. We hope that it will take that forward. It is also considering, as the hon. Lady suggested, a number of measures with respect to the high-cost credit market. It published an update on 31 May announcing a package of initial measures to tackle problems in the high-cost credit market, including a proposal to cap the cost of rent- to-own.

Those measures show the seriousness with which the FCA is taking the wider issue, and I hope that it will give this issue the consideration that it deserves. The hon. Lady has raised one of a range of issues to which the FCA will need to give careful thought. This is an example of the FCA using the powers that it has been given by the Government to protect consumers. We will continue to work closely with the FCA as it undertakes its review of, more generally, the high-cost credit market and, in particular, the logbook loan market. We will consider whether the Government should take any further action in the light of its findings. This is not the end of the story. We want to give the matter a great deal more thought.

Alongside that, the Government are taking further action to protect borrowers. We are supporting families to build their financial literacy through the Money Advice Service, and £27 million is provided every year through MAS to co-ordinate financial education in schools and to improve the public’s financial capability. A further £49 million was spent in the previous financial year on providing more than 440,000 free-to-client debt advice sessions across the country. We want to continue to look for measures to protect the public and to improve financial literacy and awareness.

I know that the hon. Lady is disappointed by the Government’s decision at this stage. I reassure her that the decision was not taken due to pressures on parliamentary time, although that is always a consideration when introducing legislation. The Government’s primary objective is to ensure that, if we legislate, we do so correctly, and bring in interventions that will protect consumers without unintended consequences. That is why we decided, following the consultation, that the Bill was not yet in the right place.

Question put and agreed to.

Oral Answers to Questions

Yvonne Fovargue Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Mel Stride]

The answer to the hon. Lady’s question is that people should clearly continue to make appropriate changes to their tax returns. I reassure her and the House that Treasury Ministers and HMRC officials are working closely across Government—particularly with the Home Office—on the issues that she raised in order to ensure that we get these matters right.

[Yvonne Fovargue (Makerfield) (Lab)]

The Government have decided not to proceed with the legislation that they committed to bring forward to protect consumers from the rip-off practice of logbook loans, despite the Bill being prepared and ready to go through the accelerated procedure. Will the Minister explain why he is prepared to allow innocent buyers to continue to be exploited through this outdated, misused legislation?

[John Glen]

The FCA is looking at a range of options, but I would be happy to meet the hon. Lady to discuss her concerns on this matter as soon as possible.

Financial Guidance and Claims Bill [Lords]

Yvonne Fovargue Excerpts

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[Alex Cunningham]

I want to speak briefly to new clause 2. While I am sure, Madam Deputy Speaker, that you have many years to go before you reach your own mid-life point, I am sure you will understand that we could all use a bit of advice at times—even though those of us with six decades or so behind us think it our duty to pass on pearls of wisdom to the younger generation.

There is plenty of talk about young people and their finances—about how they can manage their cash and get on the property ladder, which is of course impossible for many these days. This Bill does something to help young people, and I am pleased about that, but what it fails to do is help those in the mid-life stage—people who may have saved a bit, joined a pension scheme, or bought an ISA or two. More importantly, it does nothing to help those who have done none of those things and simply do not know who or where to turn to when planning their later life.

Although some excellent initiatives have passed through this House, such as Labour’s policy of auto-enrolment into workplace pensions, there have been a number of failures, not least around the issue of ’50s-born women and their state pension age, which was extended by the Tory-Lib Dem coalition by several years, condemning many such people to poverty when they should have been enjoying retirement. We could have hoped that the experience of thousands of women left facing difficulty and uncertainty would act as a salutary lesson to everyone else that they cannot really depend on Governments to deliver the security they need in retirement, but need to find ways to make provision for themselves.

People are now looking at their expected pension provision, if they have any, and then panicking about how they are going to afford to live when they retire, or are faced with the reality that they will have to work beyond retirement age in order to make ends meet. We also have people who have lived their lives just getting by—who have never been able to buy their own home and now do not know how they will afford their rent once they retire. Uncertainty is very much the name of the game in the 21st century, so we have a responsibility in Parliament to make provision to ensure that everyone, whether they can afford it or not, is able to work out how they will live when they are no longer receiving a wage. This new clause to provide targeted information to people from the age of 50 delivers that.

We all know that people can now expect to have several jobs throughout their career, and redundancy, zero-hours contracts and insecure work are clouds hanging over millions of people every day. Some people in their 50s find that they need to retrain for another role, but many do not know where to begin or where to get to the facts. This body, backed by the right promotional campaigns, including multimedia, could be a lifeline for those who ignore their money problems. I am, however, concerned about the capacity of the new body. We need to guarantee that it can expand if we are to reach many more people with guidance. I am yet to be convinced that that capacity will be there. I hope that the Minister will say something about how it can expand. I also hope that he can extend its services to provide the mid-life advice that people need.

[Yvonne Fovargue (Makerfield) (Lab)]

I, too, want to support my hon. Friends the Members for Walthamstow (Stella Creasy) and for Harrow West (Gareth Thomas). I hope that the FCA will look speedily at the total cap on the rent-to-own sector, with its inflated prices for goods and roll-up charges.

I am pleased that the Bill aims to ensure that members of the public can access good-quality, free-to-client impartial financial guidance, pensions advice and debt advice. Clauses 10 and 11, which relate to my amendment 42, require the single financial guidance body to set and enforce standards across the debt advice partners it commissions. I think that everyone agrees that the body will have to have regard to standards of practice for the organisations it commissions, but the respective roles of the single financial guidance body and the FCA should not create uncertainty. There may have to be additional requirements for organisations that it commissions.

However, an independent report to the Debt Advice Steering Group run by the Money Advice Service says that the quality assurance process for the larger debt advice charities should be authorised by the FCA. The concern is that any such new and additional requirements from the single financial guidance body should not replicate the requirements faced by the debt advice organisations from their regulator, the FCA. Having had a contract from the Legal Aid Board where we had three auditors in at one time, I was tempted just to throw the files into the middle of the room and say “Fight over them.” The auditing ought to be in the same capacity, and it should be done under one audit that covers all if there are the same requirements.

The body’s standard-setting powers also need to be matched with principles of good regulation, and conditions ought to be proportionate to the benefits they will bring. Amendment 42 would make that plain. Ensuring that the new body’s standard-setting powers have regard to proportionality would smooth its functioning, guarantee assurance and stop the uncertainty as to whether the FCA or the single financial guidance body has primacy.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

I want to speak to amendments 8 and 9, which, unlike new clause 4, would lead to an outright ban on cold calling by claims management companies.

Claims management companies make and send around 51 million personal injury-related calls and texts each year. Such calls are not only a nuisance; they exploit vulnerable people. It is worth reiterating that solicitors are already banned from cold calling in personal injury claims, but the fact that claims management companies are not risks bringing the sector into disrepute. Cold calling can generate the false perception that obtaining compensation is easy, even where there is no injury. It can put pressure on people to pursue unmeritorious or, at the worst, fraudulent claims, which they otherwise may not do. It may never have been someone’s intention to make a claim, but if they receive a text promising them thousands of pounds, it might seem very tempting.

There is an important context. The Government are proposing to reform compensation rules for whiplash claims and to increase the small claims limit in road traffic accidents from £1,000 to £5,000, and in public liability and employers’ liability claims from £1,000 to £2,000. The Government say that that is to cut down on fraudulent claims and to bring down insurance premiums. However, many, including myself, are concerned that that will have a significant impact on access to justice, with people not being able to access proper legal advice in such claims.

--- Later in debate ---

[George Freeman (Mid Norfolk) (Con)]

Given the shortness of time, I will be brief. I thank the Minister and congratulate him on providing the House with what we were looking for this afternoon. I congratulate the hon. Member for Liverpool, Wavertree (Luciana Berger), my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), the right hon. Member for North Norfolk (Norman Lamb), the Breathing Space campaign and the 80-odd colleagues on both sides of the House who have supported the proposal.

I thank the Minister and the Government for signalling what many people in the House and across the country hugely welcome: an appetite for cross-party working in pursuit of looking after the most vulnerable in society, in the spirit of the Prime Minister’s mission when she arrived in No. 10 two years ago. This will send a signal that we are serious.

Secondly, I echo the comments made by my neighbour, the right hon. Member for North Norfolk (Norman Lamb), about the importance of understanding the vicious cycle of mental health and debt, and the way in which the two are so often implicated here. Recent figures from ComRes have shown that 56% of people in work say that payday struggles are their biggest anxiety. Often that anxiety can lead to further complications in terms of depression, which can lead to mental health problems, which in turn can undermine their ability to earn and work. That often leads into a cycle that makes both the indebtedness and the mental health suffering worse, as I know from my own experience. Sixty years ago, my father won the Grand National and 10 years later he suffered a life collapse from a combination of indebtedness, bankruptcy, mental health issues and head injuries, which in those days were not well treated. It is a sign of how far we have come as a society and as a politics that we now talk about these issues so much more openly and we offer so much more help.

I shall close with my third point, which relates to the importance of that taboo. So many people in our society still suffer in silence from debt, which knows no boundaries and is no respecter of class, political affiliation or geography. People who may appear at ease and prosperous—and often those who appear most that way—are struggling in misery behind the scenes and compounding that misery through their inability to feel confident enough to talk about it. That is why, along with the co-chair of the all-party group on inclusive growth, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), we are working on a small campaign this summer with StepChange, the Money Advice Service, the Financial Conduct Authority and Martin Lewis called “Share not Shame” to encourage people to talk more openly about their indebtedness issues and to seek the help that is available. Many people in this country are paying far too much for debt that could be provided at a minimum—at a fraction of the price—and their debts could be rescheduled in a way that takes the pressure and shame from them. I welcome warmly the undertaking the Minister has given today and congratulate those Members who have led the campaign on this, which will signal across the country that this Parliament is taking their interests very seriously.

[Yvonne Fovargue]

I rise to speak to my amendment 30, which would improve the timeframe for the breathing space, ensuring its introduction by the end of 2019. That would provide greater certainty, because the current timeframe centres on the establishment of the SFGB, which is potentially moveable. I have proposed a realistic target, allowing sufficient time for the necessary preparation work. I am assured of that by the debt advice providers themselves; they say it gives enough time to plan and develop the new systems to deliver the new protections to all.

Let us not forget that debt often pushes people into a mental health crisis and that debt and depression necessitate people visiting the doctors’ surgery. They are suffering depression, but it is not that; it is the debts that are depressing them. The breathing space and statutory debt repayment plans, properly set up, will give people time and space to get debt advice, stabilise their finances through periods of temporary difficulty and put in place a long-term sustainable solution to their debts. That is not just of benefit to the individual; it benefits the creditors as well, because they know they will be getting their money back, in a fair way, over a fair period of time.

I hope that the Minister will also confirm some details of how the breathing space scheme will work. As I have said on a number of occasions, it is essential that the length of time involved is sufficient to ensure that people are not put back into the harmful uncertainty of unmanageable debt before they have that long-term plan in place. Six weeks has been mentioned, and such a period may help some people, but I have said many times that three months is probably more realistic. I have mentioned how long it takes to get people to come in and deal with the debts, with the need to open carrier bags full of envelopes that people have not had the courage to open. If we are going to start with six weeks, provision must be made for extensions to be made to that; it cannot just finish at six weeks, as it often takes longer than that to get an appointment.

I would like to see this scheme cover all relevant debts, including benefit debts, council tax debts and debts owed to central or local government. If creditors are excluded, they will be able to put the unhelpful pressure on the debtors, which will reduce the scheme’s viability and effectiveness. This has to stop creditors across the board making unaffordable repayment demands. For example, claimants on universal credit can have 40% of their benefit withheld to pay off third-party creditors, with another 40% going on paying back benefit advances—that is 80% of the money. That leaves them with 20% of what is considered the minimum amount required to live on, and that is simply unaffordable.

There is widespread unfair pressure from Government creditors. As StepChange says, bailiffs are often the first port of call rather than a last resort. Clients rate the DWP, HMRC and councils far worse than other creditors—far worse than payday lenders—for treating them unfairly. The Government should adhere to best practice, and I hope that the Minister will agree that it is in all our interests to ensure that no vulnerable people are put into a position where they are unable to pay off their debts.

[Johnny Mercer (Plymouth, Moor View) (Con)]

I rise to speak in support of amendment 5, which is in my name and those of the hon. Members for Liverpool, Wavertree (Luciana Berger), and for North Norfolk (Norman Lamb), as well as many others across the House.

We in this place often talk a very good game when it comes to mental health, and serious progress has been made in taking the agenda forward over the last few years thanks to colleagues from across the House. When it comes to parity of physical and mental health, however, small details in policy matter. The amendment concerns one such detail, and I am delighted by what the Minister has said today about bringing that into reality for some of our most vulnerable constituents. It was a manifesto commitment of the Government to introduce a breathing space scheme, whereby people who suffer from problem debt are given a fixed period without fees, charges, interest or collection. The consultation is out at the moment, and I support the proposal very much, but there is a gap in provision for those who suffer from mental health crises—those who are too unwell either to manage their finances alone or seek debt advice, and so would not be able to access this scheme.

As we have heard, last year that situation affected up to 23,000 of our most vulnerable constituents, who were hospitalised for poor mental health while struggling with debt. That does not account for those who were in a similar position while receiving mental health crisis support in the community. The link between debt and poor mental health is indisputable; it is a marriage made in hell. I pay tribute to the work of Martin Lewis in bringing together the Money and Mental Health Policy Institute, which has shone a torch on the relationship between debt and mental health. That relationship is often hidden away in some of the darker recesses of our communities, but it makes some of our most vulnerable constituents’ lives hell.

Tens of thousands of people in this country are trapped in a spiral of escalating debts and worsening mental health. Some receive court summons while they are in hospital. I know somebody who faced demands on their doorstep the day they were released following their recovery from an illness. Some people have missed bill payments while hospitalised for mental health conditions, and escalating fees and charges have led some to attempt suicide directly after contact from bailiffs.

The ask of this amendment is very clear: for the Minister to look at extending the current breathing space scheme to apply to anyone who accesses psychiatric in-patient care. We must commit ourselves ever harder to parity of esteem, as I have said. For those who have a short period of acute mental illness—who suffer panic attacks and cannot open the post, call the bank or even think coherently—going to a debt counsellor to call a halt to things is just impossible. The commitment that we seek today, and that we have got from the Minister, is important because it means that people can look to those in NHS crisis teams for advice and space in the breathing space scheme.

I thank the Minister for his willingness to listen to our concerns. The campaign has been a good one. It has involved all Members of this House and shown what can happen when those from all parts of the House work together. I come back to what I said at the beginning. We often talk a very good game—I was delighted that parity of mental health and physical health was made a manifesto commitment in 2015—but sometimes big words have to be matched by calibrated and careful actions. This is one such area, and I am delighted that the Minister has decided that he is going to work on it. I look forward to working with him and the policy institute to make that a reality for tens of thousands of people up and down the country.

Financial Guidance and Claims Bill [ Lords ] (Third sitting)

Yvonne Fovargue Excerpts

Tuesday 6th February 2018 Public Bill Committees

Brought up, and read the First time.

[Yvonne Fovargue (Makerfield) (Lab)]

I beg to move, That the clause be read a Second time.

This measure is probing and I will not press it to a vote. It was prompted by LawWorks, the operating name of the Solicitors Pro Bono Group—I know that the Minister is a great supporter of pro bono. The group is an independent charity that helps to bring together lawyers who are prepared to offer their time free of charge to individuals and community groups in need of legal advice and support.

The purpose of the new clause is not to deregulate the whole market, but to relax the prohibition that applies to solicitors working in pro bono legal advice clinics from providing advice on consumer credit matters. The prohibition arose as a result of what LawWorks believes was an unintended consequence of secondary legislation under the Financial Services and Markets Act 2000.

By way of background, in 2014 responsibility for regulating consumer credit and consumer credit advice in the UK was transferred from the Office of Fair Trading to the FCA. As part of the regulatory transfer, the group licensing regime was abolished and replaced by the individual authorisation and permission regime for credit-related regulated activities.

The regulatory transfer has not affected the not-for-profit organisations such as local citizens advice, which operate under an OFT group licence, because it could continue under the grandfathering provision. The Law Society’s group licence, however, could not transfer under that provision, because the Law Society is not a not-for-profit organisation. Although LawWorks and the clinics in its network are not-for-profit organisations, they have not been able to rely on the grandfathering provision because they did not have their own group licence before 1 April 2014. As a consequence, the solicitors and firms who volunteer at clinics are at risk of committing a criminal offence by breaching the general prohibition in the FSMA when providing debt and consumer credit advice services.

The new clause would simply make a legislative change to the FSMA to enable the services to be provided without the need for FCA authorisation in a discreet range of services. I certainly do not want an unregulated market, but I want pro bono solicitors to be able to offer the advice they are trained to give. It complements one of the Bill’s main aims, which is to facilitate a free and impartial money guidance service to the public.

[Guy Opperman]

It is a delight to respond to a very important and legitimate point. I should make a number of declarations at the outset: I know LawWorks very well, I set up a free representation unit and a pro bono unit, and two Labour Peers have given me awards for my pro bono works in the past. Lord Goldsmith and Baroness Scotland were both most ill advised in giving me the pro bono lawyer of the year and then a pro bono hero award for exactly this sort of work, although not in respect of debt advice. I have great sympathy with the hon. Lady’s point. I will address it briefly now but am happy to discuss it in more detail.

There are a number of easy arguments to make. Most importantly, this is a matter that the single financial guidance body can already address. Clause 3(5), (9) and (10) give capacity for the single financial guidance body to review the provision of those types of arrangements, and to make recommendations once it has come to a conclusion on whether it is an appropriate way forward.

I accept and acknowledge that the FCA transfer has created some anomalies, but there is a reason why. The hon. Lady will fully understand that the Government are keen to ensure that consumers in problem debt have access to high-quality, regulated debt advice. The new body will, to a great degree, go a long way to ensure that that specific goal is met, but there are a couple of extra points I will make.

First, it is important to note that, during the transfer of debt advice regulation to the FCA, the not-for-profit debt advice providers widely supported the FCA regulation of their activity because they felt it was important to ensure that all debt advice was of a high quality. Secondly, with great respect to LawWorks and the point made, I do not believe the assertion made is appropriate. Of course, individual organisations can apply to be regulated if they so choose, or to get a group regulation under FCA rules, but I think it appropriate that we consider it in more detail and invite the SFGB to go away and decide whether it is something it would recommend as part of the statutory remit we have set up under clause 3. In those circumstances, I invite the hon. Lady not to pursue her new clause.

[Yvonne Fovargue]

I thank the Minister for his reply and I am pleased that he has taken on board the principle. Certainly we do not want to deregulate the Debt Advice Network. I am in favour of it being a regulated body so that we can have high-quality advice. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

[Guy Opperman]

Am I correct that we have now finished all particular clauses that need to be decided thus far?