Oral Answers to Questions
Debate between Andrea Leadsom and Paul Blomfield(7 years, 9 months ago)
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Andrea Leadsom
I am afraid that just shows that the hon. Gentleman does not really understand how the energy market works. His party’s proposal to cap energy bills to consumers was a grave mistake, because we have seen wholesale prices come down and all consumers have benefited from that. I say again that this Government are absolutely committed to getting bills down for consumers at every opportunity, to implementing the CMA’s significant reforms and to looking at what else is available to be done.
Paul Blomfield (Sheffield Central) (Lab)
4. What assessment she has made of the potential effect of the outcome of the EU referendum on the ability of the UK to meet its climate change commitments.
Mr Jim Cunningham (Coventry South) (Lab)
6. What assessment she has made of the potential effect of the UK leaving the EU on the ability of the UK to meet its climate change obligations.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The UK’s climate change commitments are grounded in the UK’s Climate Change Act 2008, which commits us to a reduction in emissions of 80% by 2050, from 1990 levels. Our membership of the EU has no impact on our commitment to this Act, as hon. Members will have seen in our decision to accept the Committee on Climate Change’s advice on the level of the fifth carbon budget just two weeks ago.
Paul Blomfield
I thank the Minister for her answer, but she will know that the Committee on Climate change has said that tackling climate change is going to be more difficult outside the EU. The vote to leave does not give the Government a mandate to undermine the global transition to clean energy, so will she confirm that the UK will maintain its commitment to meeting our 2020 clean energy target, which was agreed as part of the EU’s climate and energy package?
Andrea Leadsom
The UK is a world leader in tackling climate change. The 2008 Act is a UK Act that we are absolutely committed to. We are outperforming on our target on energy renewables by 2020, and we remain committed to that.
Energy Bill [Lords]
Debate between Andrea Leadsom and Paul Blomfield
Paul Blomfield (Sheffield Central) (Lab)
I shall speak briefly in support of new clause 11, to which I am delighted to have added my name, and I pay tribute to my right hon. Friend the Member for Doncaster North (Edward Miliband) for the amendment, the consensual way in which he has built the discourse around it, and the work that he did as the country’s first Secretary of State for Energy and Climate Change.
Climate change is an issue on which all of us have been lobbied by many groups. Most strikingly for me, I was lobbied last year by a group of students from Notre Dame school, a secondary school on the edge of my constituency, who came to Westminster to make the point that their generation was conscious of the consequences they would face if our generation failed to act. It is an incredibly powerful point, but our responsibility goes beyond the immediate generation.
A report published only last month in the journal Nature Climate Change pointed out that much of the discourse has been focused on the consequences of failing to act by the end of this century. Looking beyond that, the problems are even more serious. According to one of authors,
“We are making choices that will affect our grandchildren’s grandchildren and beyond.”
He continued:
“We need to think carefully about the long timescales of what we are unleashing.”
That was Professor Daniel Schrag from Harvard University.
The need to act, and to act more ambitiously, has never been clearer. The agreement of the Paris summit is a step forward, but as last month’s report highlighted, even if global warming is capped at Governments’ target of 2 oC, which is already seen as difficult, 20% of the world’s population will eventually have to migrate away from coasts swamped by rising oceans. Cities including New York, London, Rio de Janeiro, Cairo, Calcutta, Jakarta and Shanghai would all be submerged. We have seen the struggle to grapple with the refugee crisis that has grown over the last couple of years, a crisis driven by war in one country and a number of other related conflicts. Imagine for a moment what we will face if 20% of the world’s population is forced to do what people have always done when their homes become uninhabitable—to move to somewhere better.
So we need greater ambition and a greater sense of urgency. That is provided by new clause 11. In the words of Professor Thomas Stocker from the University of Bern, one of the other authors of the report:
“The actions of the next 30 years are absolutely crucial for putting us on a path that avoids”
the worst outcomes
“and ensuring, at least in the next 200 years, the impacts are limited and give us time to adapt.”
The reservations that the hon. Member for Aberdeen South (Callum McCaig) expressed in his comments on the new clause are taken into account in the careful and thoughtful way that the clause has been drafted and the role that it provides for the Committee on Climate Change. What we need is the ambition embodied in the clause. As my right hon. Friend said, we did it with the Climate Change Act 2008, passed with all-party support, which sent a signal to the world. We can do that again; we cannot afford not to. The future is bleak if we do not cut our emissions further than Paris suggested.
The role that the new clause proposes for the Committee on Climate Change is important for the robustness of that ambition and its workability. I am pleased to hear the constructive engagement that there has been between my right hon. Friend and the Secretary of State. I hope that in her comments later we will hear that together we can move forward on the issue.
Andrea Leadsom
Government amendments 48 and 49 add the relevant provisions of the Oil Taxation Act 1975 and the Corporation Tax Act 2010 to the legislation listed at clause 2(6), which contains the Secretary of State’s relevant oil and gas functions. This ensures that the functions provided for by these Acts fall within the definition of “relevant functions” and can be transferred from the Secretary of State to the Oil and Gas Authority by regulations made under clause 2(2).
Schedule 1 to the Oil Taxation Act 1975 and chapter 9 of part 8 of the Corporation Tax Act 2010 contain the important oil and gas functions of determining oil fields and cluster areas, respectively. These functions form the basis of oil taxation. Petroleum revenue tax is applied by determined field, and allowances are given by cluster area to reduce the amount of profits to which the supplementary charge is applied. Both of these are functions currently undertaken by the Oil and Gas Authority in its capacity as an Executive agency, and are fundamental to our tax regime and to incentivising investment. These amendments are technical in nature and simply seek to put it beyond doubt that these key functions can be transferred to the OGA once it becomes a Government company, as we have always intended.
Let me briefly explain Government amendment 51, to the long title. The amendment is consequential on the removal from the Bill in Committee of the clause on carbon accounting under the Climate Change Act 2008, which was introduced in the other place. It ensures that the Bill is compliant with the parliamentary convention that Bills should move between the Houses in a proper state.
New clause 3 was tabled by the hon. Member for Aberdeen South (Callum McCaig), and new clause 7 was tabled by the hon. Member for Wigan (Lisa Nandy) and others. I should add that the hon. Member for Stockton North (Alex Cunningham) has been a long-standing advocate of CCS, which he and I have discussed on a number of occasions, so I hope he will acknowledge that I have studied the subject.
Financial Services (Banking Reform) Bill
Debate between Andrea Leadsom and Paul Blomfield(10 years, 4 months ago)
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Andrea Leadsom
Yes, my hon. Friend is absolutely right. There are huge parallels between the banking closed shop and the energy closed shop. That is something I have been picking up, and I was recently in the media with him addressing this very subject.
Giving direct access to the payments infrastructure to all banks will reduce the barriers to entry, so I want further to congratulate the Minister on accepting the Treasury Committee’s recommendation that the PRA should have a specific competition objective. That is key, because the barriers to entry do not just relate to access to the payments system; there are regulatory barriers to entry. In other words, “If you are small, you cannot become a bank. Until you become a bank, you cannot become big. Therefore, you cannot ever become a bank.” We have created an environment where there are massive barriers to entry, so the payments system changes will really start to unravel that closed shop.
Importantly, I wish to put in one plea for full bank account portability. I know that the Minister has absolutely agreed that one of the first jobs of the new payments regulator will be to undertake a full cost-benefit analysis of account number portability. That would mean that if I want to switch banks in future, instead of waiting for even seven days, having to change all my direct debits, standing orders and bank account details, and having to be issued with new credit cards and cheque books and so on, I would simply be able to have my bank account details re-pointed at a new bank and so everything would remain the same. It would be instantaneous account switching.
When we move our mobile phone account number now, we can take our phone number with us. In a world where we had full number portability, we would also be able to take our bank account details with us. That would be a radical game changer for competition. New entrants could come in and attract new business on the promise that if a consumer does not like them they can always move somewhere else tomorrow. Banks would lie awake at night wondering how to retain their customers through excellent customer services rather than what next they can fleece them with, which happens all too often now.
Competition is not the only issue. There are two other items I wish to mention. The first is about resolution. We have put in all this effort to try to ensure that, in future, a bank cannot fail. We have increased capital requirements and changed the regulatory structure, which is all to the good. None the less, we know that in future, as sure as eggs are eggs, a bank will fail. What bank number portability will do is to give an instant means of resolution to avoid ever seeing again queues of people down a street trying to get their money out of a bank that they are concerned about.
If we in the UK become the first country to introduce full bank account number portability, we will be leading the world. By creating a shared infrastructure for payments, we will create a massive business opportunity for UK plc. I congratulate my hon. Friend, the Minister, but urge him to go even further and to support, when the time comes, the prospect of full account number portability.
Paul Blomfield (Sheffield Central) (Lab)
Like my hon. Friend the Member for Makerfield (Yvonne Fovargue), I rise to speak on amendment 155. The Minister has acknowledged that data collection is at the heart of effective regulation. Like many Members on both sides of the House, I welcome the Government’s conversion to capping the total cost of credit, but we need to recognise that it is not a silver bullet.
When I was fortunate enough to have the opportunity, through the private Member’s Bill ballot system, to prepare the High Cost Credit Bill back in July, I brought together Members from both sides of the House—I am pleased to see that one of them, the hon. Member for East Hampshire (Damian Hinds), is in his place—and all the major consumer voice and debt advice organisations, such as Which?, Citizens Advice, StepChange and the Centre for Responsible Credit, to try to develop a holistic approach to the regulation of payday lenders, with appropriate interventions at every stage of the relationship that lenders have with their borrowers from advertising right through to debt collection. At many points in that relationship, the issue of real-time data collection is absolutely vital to tackle multiple lending. We know that multiple lending is the source of many of the problems that people face. Unable to repay one loan, they are forced to resort to taking out additional loans, moving from a single unaffordable debt to multiple loans, creating completely unmanageable debt.
As my hon. Friend the Member for Makerfield has pointed out, the current reporting framework for credit reference agencies of 30 to 60 days simply cannot protect people from the problems that result from multiple lending. Only real-time data collection can effectively do that.
Secondly, we have the impact on the market. As part of the debate on payday lending, many people have argued that we cannot solve the problems by regulation alone and that we need a wider range of more affordable products. That is absolutely right, and real-time data are key to that too, because they will enable lenders to assess risk.
At a recent hearing of the Business, Innovation and Skills Committee, one of the lenders selected by the Consumer Finance Association as a representative of the industry said:
“We do not know in real-time what loans the customer has with other lenders.”
He said that they would
“love to know that information.”
It is impossible for lenders properly to evaluate risk, set interest at manageable levels and develop new products. As other Members have said, the opportunity that real-time data would provide for new entrants to the market is also crucial.
Above all, real-time data are essential to ensuring affordability, which is at the heart of the measures needed to protect people. The industry works in a distorted market. We know that: success is measured by the time it takes to get money into somebody’s bank account, not by the ability to repay. It sounds perverse that many lenders are not primarily concerned about ability to repay. As the OFT has highlighted, up to 50% of payday lending revenue comes from 28% of loans—those that are unaffordable—so providing real-time data is at the core of shifting the business model for payday lending from speed of lending to affordability and is the key to protecting people from spiralling and unaffordable debt.
I mentioned the recent Select Committee inquiry, which will report soon. My hunch is that it will say something along the lines of the report we published two years ago—that real-time data collection is critical to transforming the payday lending industry. We have heard from a number of Members that debt advice agencies are clear that we need real-time data collection and sections of the industry also want it. As the shadow Minister, my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), has pointed out, the industry has been slow to respond. It has been considering the issue for two years and has failed to find a solution that all participants will buy into. As the industry has failed to produce an initiative, it is our responsibility to step in and secure real-time data collection.
I would cite in support of that assertion the response of the Financial Services Consumer Panel to the Financial Conduct Authority’s consultation on its proposals on payday lending. As Members will know, the Financial Services Consumer Panel is the statutory body that monitors how far the FCA fulfils its statutory objectives for consumers. It is a critical voice in this debate. The panel has said that
“better creditworthiness assessments must be underpinned by real-time data sharing capabilities.”
On affordability, it has stated:
“In order for this information to be available we believe the establishment of real-time data sharing is vital.”
It has also stated:
“In addition to limiting rollovers, the Panel also feels that real-time data sharing is essential in ensuring people do not end up with excessive numbers of loans at the same time.”
It goes on:
“The speed at which loans are granted is often cited as the reason for”
unaffordability and rollovers, and:
“Real-time data sharing would overcome this and should be something the FCA encourages…There are examples of other jurisdictions, such as Florida…where this has been achieved.”
Indeed, the Minister cited Florida as an example earlier.
The panel comes to the conclusion that it strongly calls for the establishment of real-time data sharing and I hope that the Government will listen to that.