Financial Services Bill

Debate between Angela Eagle and Jessica Morden

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Jessica Morden (Newport East) (Lab) [V]]

I wish to speak briefly in support of new clause 7, tabled by my hon. Friend the Member for Walthamstow (Stella Creasy), to whom I pay tribute for her work with campaigners on the issue. Her new clause would require buy-now-pay-later operators to be regulated by the FCA.

As others have said, buy-now-pay-later is a new and growing industry, the popularity of which has rocketed in the pandemic, with one company reporting a 43% increase in sales. It is a form of credit that promotes impulse buying—one in four users spend more than they planned—and it is targeted at young consumers who are pursued by companies using celebrity influencers and targeted ads. StepChange, the debt charity, is seeing many more under-40s coming forward for advice with this type of debt. Let us protect consumers and properly regulate the sector, which is currently uncontrolled and operating with a social media-savvy face. Let us not wait for people to get into trouble with unsustainable levels of debt, particularly when we will see an increase in personal debt because of the pandemic.

[Dame Angela Eagle (Wallasey) (Lab)]

I wish to focus on two areas: equivalence with the European Union for our financial services sector and financial crime. I also support the efforts to provide more protection against abuses in the consumer credit market and the mortgage market.

As a result of the Government’s decision to pursue a very hard Brexit and the ending of the transition period, UK financial service companies have now lost their passporting rights to EU countries. The Government’s trade and co-operation agreement with the EU in effect sidestepped financial services, putting at risk many jobs in the sector and much tax revenue for the Exchequer. The deal means that there is an agreement for goods, in which the EU has a trade surplus with the UK, but nothing for services, in which the UK has a huge trade surplus with the EU. There is a feeble non-binding declaration to establish a framework for co-operation on financial regulation, but there is no sign of any rush from the EU to grant the UK equivalence so that the loss of passporting rights can be overcome and continued market access to our financial services sector can be achieved. Perhaps the fact that €6 billion of share trading formerly done in London migrated to Paris and Amsterdam on the first day of post-Brexit trading is encouraging Brussels to drag its feet and hope that much more will follow. Over time, I fear that this Government’s lack of interest in protecting equivalence for financial services is more likely to lose us jobs and revenue than inaugurate the big bang 2.0 that the Chancellor was fantasising about in the Commons earlier this week.

Financial and economic crime is a huge problem, and one that the Government have been far too slow to address. Their own estimates suggest that one in five people in the UK falls victim to fraud every year. There is £6 billion of organised fraud against business, and this is getting worse. The extent of economic crime in the UK, including money laundering, fraud and corruption, led the Intelligence and Security Committee in its report on Russia to note that London is now considered a “laundromat” for corrupt money. As the scale of global corrupt wealth enmeshed in the UK property market becomes visible, we need an urgent step change in the Government’s response, especially on transparency of overseas property ownership, and a tightening up of the company formation process in the UK. More needs to be done, and urgently, to crack down on this behaviour.

The Secretary of State’s Handling of Universal Credit

Debate between Angela Eagle and Jessica Morden

Wednesday 11th July 2018 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

I too want universal credit to work, but yet again the Secretary of State has come to the House, in the face of evidence and feedback from the NAO, CABs, food banks, housing associations, local government and others, and just appears to want to ride it out and brazen it out. That is deeply worrying and disappointing for my constituency because Newport has only had about 10% roll-out so far, and those are the easy cases—new claimants, single people without children, families with no more than two children. Yes, some people will have managed to navigate universal credit, but, as the NAO report says, for a “substantial minority” that is not the case. We need to address the problem as a matter of urgency before the roll-out reaches the more complicated cases. involving moving people from legacy benefits and people with larger families.

During this limited roll-out, we have also seen the problems documented by the NAO report reflected locally, and alarm bells should be heard. There have been problems with the initial claims: for instance, one family were inadvertently moved to universal credit and had to be returned to legacy benefits. It took 99 days for the lost tax credits to be fully recovered. According to the report, one in five claimants do not receive their full payments on time, and on average those claimants have been paid four weeks late. That means that many people do not receive their full payments for eight or nine weeks—and they are often people with no savings on which to rely. Some of my constituents have to resort to using food banks. One local food bank reports giving out 300 extra parcels every month over and above the increase that it anticipated. Other constituents do not want the advance payments because they do not want to go into debt, and are borrowing from loan sharks or from family and friends instead.

I agree with all the points that have been made about the online system, but let me add one more. People who have no individual ID, such as a passport or driving licence, now face a longer wait for an appointment before they can get into the system into which the delay is built. Those are often the most vulnerable people, and that too needs to be addressed.

Advice services such as citizens advice bureaux are seeing more and more people, and Newport CAB tells me that most of the problems involve initial claims. Arrears and debt problems do not just go away, as is shown by the Government’s own full service survey. Housing associations and local authorities are picking up the extra costs. Rent arrears alone are costing housing associations in Wales more than £1 million.

Let me take this opportunity to thank the hard-working DWP staff out there. According to a survey conducted by the Public and Commercial Services Union, 80% felt that there were not enough staff to manage the workload. I know that they are doing their best with the resources that they currently have, and I thank them for what they are trying to do.

[Ms Angela Eagle]

Does my hon. Friend agree that, while DWP staff are remarkably good at the job they do, they must have the tools they need to do that job, and many are frustrated that they do not have them?

[Jessica Morden]

I absolutely agree. I believe that they are doing the best they can with the tools that they have been given, but they need far more resources.

I hope that the Minister who winds up will adopt a more conciliatory tone. It is not enough to say that the delays can be solved by advance payments, or that it is too early to assess the impacts. The evidence is plain to see in our constituencies. The Government have been forced to change parts of this policy, and it is now time for them to pause and listen. If the roll-out speeds up and takes on the more complicated cases, we will, I fear, see only more debt and hardship among those who need the system to help them into work, or to support them if they cannot work.