Financial Services Bill

Baroness Coussins Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 28th January 2021 Lords Chamber

[Baroness Coussins (CB)]

My Lords, I declare my interest as an ambassador and former president of the Money Advice Trust, the charity which runs National Debtline and Business Debtline. I, too, congratulate the noble Lord, Lord Hammond, on his excellent maiden speech, and look forward later on to the second maiden speech in this debate, from my noble friend Lady Shafik.

I comment first on Clause 34 in relation to the debt respite scheme and, in particular, statutory debt repayment plans. I am delighted that the first element of the debt respite scheme, Breathing Space, is coming into force on 4 May this year. This will give people in debt much needed protection while they seek debt advice. But it is vital now that the Government prioritise the introduction of the second element of the scheme, which is statutory debt repayment plans—SDRPs. They have never been more needed than now, in the wake of Covid-19, and I hope the Government will set out a clear timetable for their implementation.

After all, there is a great deal of agreement on their merits. They will ensure that people who are repaying their debts in full, but who need to do so in an affordable way over a manageable period, will receive binding, legal protection from creditor action and from having additional interest, fees and charges added to their debts. Crucially, public sector creditors—including local authorities and central government—are included in the scheme, and I commend the Government for taking this step. When the Government first consulted on introducing SDRPs in 2018, no one could have foreseen where we would be today, in 2021, facing the severe financial impact of a pandemic, but it is clear now that SDRPs can be a key part of helping households to recover from the financial impact of the outbreak.

I would like to illustrate with one very quick example. Imagine a couple, with two children—one of them furloughed, the other with their hours cut. They struggle to cover their bills and miss a few council tax payments. Being at home with the children more than usual means their energy bill is higher than expected, so arrears build up. They have a mortgage and some outstanding consumer credit debts too. Despite getting an initial payment break on these, this has now expired. Fast forward a few months and, promisingly, they have returned to work and their income has stabilised. They can afford to make some payments towards their debts every month, but not enough to meet their obligations in full. As a result, the council starts enforcement proceedings to recover the arrears, and the energy company wants paying too. This couple will be able to repay their debts in full, but they need time. They need an option to do so affordably without being chased for more than they can pay or having extra fees or charges added. This is exactly what a statutory debt repayment plan would offer them, and it would stop their temporary financial difficulty growing into a bigger debt problem.

Of course, it is understandable that some time will be needed to pass regulations and ensure the necessary infrastructure is in place to introduce these repayment plans, but I hope that the Minister can assure the House that this will be an absolute priority for the Treasury. I ask the Minister to ensure that the Government set out a firm timetable for introducing the new plans.

I turn very briefly now to another important issue that I hope the Government will consider as the Bill progresses through this House. The Bill considers future regulation and rightly highlights the importance of maintaining high consumer protection standards. One area of current concern is that of “imposter” or “clone” websites which pose as legitimate free debt advice charities. Of course, the National Debtline or StepChange actually are free debt advice charities, but these imposter websites can be highly convincing and can mean individuals end up thinking they are speaking to a free debt advice charity when they are not. They may end up in inappropriate debt solutions or being charged significant fees. Will the Government use the Bill to close the regulatory loophole that allows this to happen by bringing forward an amendment to bring the activity of introducing an individual to a debt advice or debt solution service within the FCA’s regulatory remit?

Given the financial impact of Covid-19, it is more important than ever that people are offered safe routes out of debt, and I hope the Government will continue to make this a priority, through this Bill and elsewhere.

Financial Services Bill

Baroness Coussins Excerpts

Committee stage & Lords Hansard
Wednesday 3rd March 2021 Grand Committee

Moved by

[Baroness Coussins]

52: Clause 34, page 40, line 15, leave out “and (4)” and insert “, (4) and (4A)”
Member’s explanatory statement
This amendment, and the amendment to page 40, line 32 in the name of Baroness Coussins, would require that the Statutory Debt Repayment Plan element of the debt respite scheme would have to come into force before 1 May 2024.

[Baroness Coussins (CB)]

My Lords, I am very glad to open the debate on this group, although I fear that we may be interrupted at least twice if votes are called in the Chamber; I see that the Minister is on his feet there now.

I declare my interest as an ambassador and former president of the Money Advice Trust, the charity that runs National Debtline and Business Debtline. In moving Amendment 52, I will also speak to Amendment 67 in my name, to which the noble Baronesses, Lady Morgan of Cotes and Lady Kramer, and the noble Lord, Lord Rooker, have added their names. I warmly welcome their support.

Before dealing with my own amendments, though, I want to say a brief word about the probing Amendment 54 in this group, in the name of the noble Lord, Lord Stevenson, who has done so much to secure the introduction of both the Breathing Space scheme and Statutory Debt Repayment Plans. I hope the Minister will be able to provide clarity today on universal credit advances and third-party deductions, and I am sure the noble Lord, Lord Stevenson, will set out further details on those issues. At Second Reading, I also mentioned the problem of lead generator firms or imposter websites, so I also welcome Amendment 111 in this group, in the name of the noble Lord, Lord Holmes of Richmond, and others. I look forward to hearing the Minister’s response on what action the Government intend to take on this issue.

--- Later in debate ---

Overall, with those explanations, and with the undertakings that I have given to engage further with noble Lords, I hope they will feel able to withdraw or not move the amendments in this group.

[Baroness Coussins (CB)]

I thank all noble Lords who have contributed to the debate on this important group of amendments, especially those who supported my own two amendments on the introduction of SDRPs.

I am extremely grateful to the Minister for such an encouraging and sympathetic response. I will say only that the inclusion of the date of 1 May 2024 is there not as a fixed date but as a “no later than” date. Nevertheless, he has given me enough hope that we might meet again between now and Report to have a further discussion on this issue to see if any further progress can be made. In the meantime, I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

Financial Services Bill

Baroness Coussins Excerpts

Report stage
Wednesday 24th March 2021 Lords Chamber

[Baroness Coussins (CB) [V]]

My Lords, I support Amendment 11 in the name of the noble Lord, Lord Stevenson of Balmacara, and I remind the House of my interest as an ambassador and former president of the Money Advice Trust.

Although Clause 34 may be seen as a relatively small part of the Bill, we have had a great deal of discussion on it during the passage of the Bill—a sign of how important SDRPs are. Throughout the process, I and other noble Lords have been keen to secure clarity over the timetable for introducing SDRPs.

I thank the Minister for his positive and constructive engagement on this issue and for meeting me and the noble Baroness, Lady Morgan, to discuss the timings for the introduction of SDRPs. Like the noble Lord, Lord Stevenson, I am also grateful to the Minister for his letter yesterday, which provided further clarity on this timetable.

In Committee, the Government did not accept my amendment to include a specific date by which SDRPs should be implemented. I was pleased nevertheless to hear the Minister confirm that the complex and detailed process to prepare for implementation seemed to be entirely compatible with the end date I was proposing—albeit pretty tightly.

So I hope the Minister will be able to confirm that on the record this evening, by specifying the various stages of the Treasury’s intended timetable for laying the regulations and reassuring the House that SDRPs are genuinely intended to have a commencement date before May 2024. I look forward to the Minister’s reply.

[Baroness Kramer (LD)]

My Lords, I join in congratulating the noble Lord, Lord Stevenson of Balmacara, on his amendments in Committee and again here on Report. He has clearly found a mechanism for engaging very fruitfully with the Government, and therefore we all have the benefit of a letter that lays out some of the important and significant elements of statutory debt repayment plans; for that, I am grateful.

I join with the noble Baroness, Lady McIntosh, in being rather perturbed—I think the noble Lord, Lord Stevenson, was as well—that the implementation date is 2024. I think that the noble Lord, Lord Stevenson, said that it was towards the end of 2024. I advise the Government not then to use terms such as “at pace”, which they use extensively in the Financial Services Bill—usually to argue that there is no time for a statutory instrument to be approved by Parliament, which takes a matter of weeks.

I am rather troubled and it suggests that the Government might want to think of some kind of stopgap to deal with the very significant number of people who will find themselves with debt problems as we come to the end of furlough. People will find that they have been moved into permanent redundancy and that other jobs are hard to obtain, and a lot of young people coming out of university courses will not find the usual opportunities.

We are going to go through a very rough period where quite a number of people will find themselves loaded down with private debt, not because they have behaved inappropriately in any way but because the way events have hit them. They will need some additional support and rescue, rather than just the schemes that are in place. The SDRPs would almost certainly have been ideal for many of them. So I hope the Government will look at the events that are going to force a lot of people into a very difficult position.

Amendment 12, tabled by the noble Baroness, Lady Bennett, would do what I think Amendment 55 in Committee was intended to do. This time I think it would do it. It is designed to enhance opportunities for people who have signed up to SDRPs to pay off their debts early at a discount. It will need some structure and engagement from social enterprise groups and perhaps even the Government providing some measure of support, because seed funding will be needed to get a scheme such as this off the ground. I hope that the Government will think some of that through. It seems the kind of scheme that would enable people to get back into the financial mainstream more quickly, which is surely something we want to achieve. Again, the need for that will be more acute because of the extraordinary number of people who will find themselves in debt as a consequence of Covid. I do not think it actually requires legislation, so I am glad that the noble Baroness, Lady Bennett, will choose not to move it.

These two amendments highlight the need for some serious thinking on how the Government can best support people who will come out of Covid and find themselves in fairly difficult circumstances. When we work with people who have debt problems, a fundamental issue usually has to be dealt with that has led them into that corner. Sometimes it is to do with lifestyle choices, but very often it might be mental health issues or family breakdown. The group who will find themselves in problems because of the impact of Covid do not fall into that category. Therefore, with a proper helping hand at the right time, they could quickly and easily be returned to a position where they are no longer financially excluded or in financial difficulties. That is absolutely necessary if we are to see the recovery that we all hope for. I hope the Government will look at these amendments and continue to build on them, rather than consider them concluded because Report has passed.

Financial Services Bill

Baroness Coussins Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[Baroness Coussins (CB)]

My Lords, I support Amendment 16, in the name of my noble friend Lady Meacher and others, and I remind the House of my association with the debt advice charity the Money Advice Trust.

Anyone who has been involved with debt policy knows that the issue of bailiff regulation is a long-standing concern. Bailiffs have significant powers, including being able to enter people’s homes and take possession of their goods. Unfortunately, despite plenty of good intentions and existing voluntary national standards and codes of practice intended to govern bailiff behaviour, widespread problems remain in practice. These include bailiffs misrepresenting their powers, the failure to offer affordable repayment plans, and unfair treatment of vulnerable people or people in vulnerable circumstances. As my noble friend Lady Meacher has outlined, independent oversight would be an enormous step forward in helping people in debt to cope with, manage and overcome their predicament without unnecessary and unjustifiable additional pressures.

Noble Lords will be aware of the promising discussions currently taking place between representatives of the debt advice sector and the enforcement industry, facilitated by the Centre for Social Justice, to explore the potential for an independent oversight body. The aim of such a body—which would be funded by the bailiff industry—would be to address these problems and to raise standards. For the first time, both the bailiff industry and the debt advice sector are agreed that, for such an oversight body to be effective in raising standards, it must have statutory underpinning.

The amendment in the name of my noble friend Lady Meacher and others provides an opportunity to do just this. Of course, there are challenges to the parliamentary timetable, and relevant Bills in which to include issues such as this can be few and far between. The perverse and worst-case scenario would be to have a fully developed and agreed proposal for an independent oversight body which could not be put in place because the Government did not have the necessary powers. If the Government miss the opportunity to take action in this Bill, meaningful change is likely to be delayed much longer, with harsh consequences for people in debt.

So would it not be better for the Government to be proactive now and to accept this amendment—or, at the very least, come back with a similar version of their own at Third Reading? We cannot escape the fact that, despite the welcome support that has been put in place, debt problems will increase as a result of the pandemic. More people may face the prospect of bailiffs at their door and it is only right that the industry is properly governed and regulated, as other debt collection companies are. The Government have previously stated that they want to see practice in this sector improved and regulation strengthened. This amendment gives them the opportunity to do so. I hope that the Minister will accept it, or commit to coming back at Third Reading with something just as good or better.

[Lord Blunkett (Lab)]

My Lords, this group of amendments contains issues of profound importance. It is not surprising, therefore, that our progress this afternoon has somewhat slowed. I can be blissfully short, because the noble Lord, Lord Young of Cookham, spelled out in his usual eloquent and detailed fashion why Amendment 37C should be taken very seriously and that a solution must be found to the challenge that he laid out. Like the noble Baroness, Lady Altmann, I pay tribute to the noble Lord for his dedication and commitment. I have been proud to work alongside him. One of the great pleasures of this House is that it is possible to work effectively—I hope effectively—across party. The case that he made this afternoon, which he has been making for the last few months, is in my view unanswerable. The issue, therefore, is what progress can be made and what can be done.

The noble Lord, Lord Wolfson, has taken this issue seriously and to heart since he joined the House and took up his present position. Forgive me if I call the noble Lord, Lord Young, my noble friend. As he has spelled out, it is surely not beyond the wit of woman or man—working groups that do not meet or address issues aside—to be able to unlock funds that are essential, albeit small, for those for whom they were intended. My noble friend kindly indicated my history in this area. It was blighted by not having spotted that the Mental Capacity Act, which succeeded the decision to introduce child trust funds, would inadvertently lead to those funds being blocked for the most vulnerable.

I still regret very strongly that the early part of the coalition Government abolished child trust funds—driven, it has to be said, by the then Chief Secretary and not by the leading party in the coalition. But that is water under the bridge. The paradox of course is that, had the child trust funds continued and been delivered in the way originally intended—including continuous top-up funding—we would have been in a more difficult position in releasing these funds for those with learning disabilities, because the funds would have been much greater. Sometimes there are twists in life which you do not see and sometimes there are those you wish you had not.

This is a simple issue here, whether it is about Holly who was highlighted by my noble friend Lord Young, or Mikey, highlighted by the noble Baroness, Lady Altmann. I originally heard Mikey’s father outlining these issues on “Money Box”. He was also mentioned by the now leader of the Liberal Democrats in the other place. Those young people demonstrate the wider issue of access to modest but important funding that can help them at a crucial time of transition into adulthood, as was originally intended. There is also the profound issue of the growing capital asset divide in our country. With house prices accelerating as they are now, this divide will increase still further.

So I will make a very simple appeal. The noble Lord who is leading on this amendment will not press it to a vote. However, I think that the feeling of this House—both on the numerous previous occasions on which the issue has been raised and again this afternoon by noble Lords both online and present in this Chamber —is that a solution must be found, and found quickly. My experience during eight years in the Cabinet was that there were very good civil servants who explained, quite rightly, why something could not be done. I always valued them because they prevented me putting my foot in it more often than I did. But the best civil servants were the ones who highlighted the problem and then came up with a solution.

Financial Services Bill

Baroness Coussins Excerpts

3rd reading & Report stage
Monday 19th April 2021 Lords Chamber

[Baroness Kramer (LD)]

My Lords, once again I thank Lord Judd, because he contributed to this Bill, so it is entirely appropriate to reference him, as we close and the Bill passes. This was originally presented as a “limited, technical Bill”. Whoever thought up that phrase is probably now assigned to writing detailed amendments on obscure financial practice, because it has been anything but.

From my perspective, we had three major areas to tackle in this Bill. We have talked about the constitutional issues of regulator accountability to Parliament, which are overwhelmingly important to this House and the other place. We have also dealt with extensive legislation that impacts ordinary consumers. One can never overstate the importance of dealing with issues such as debt, mortgage prisoners, sharia finance, access to cash or financial exclusion. They are crucial to the people of this country and to everyday lives, so I am very glad that they formed a major part of this Bill. Thanks to the noble Lord, Lord Holmes, we have had some particular success—and perhaps will have more success with the amendments that we passed.

We also dealt with the environment and made some real progress in that area. I regret that by one vote only—because it was a tie—we did not get our capital adequacy amendment through but I think the House will, at some point in time, be back discussing that issue. I also suspect that, at some point, the PRA will announce the changes to capital adequacy ratios that reflect the underlying stranded assets associated with fossil fuels in various forms. That, too, I see as a work in progress but it was an important discussion and put down some very significant markers.

I want to thank the Public Bill Office. I cannot remember a piece of legislation where so many amendments appeared in each round, both in Grand Committee and on Report. Its work in turning around those amendments to ensure they were in an appropriate form was very much appreciated.

I join in thanking the noble Earl, Lord Howe, the noble Baroness, Lady Penn, and the noble Lord, Lord True. I say to all three of them that we appreciate that they listened to what we had to say and, whether they agreed or disagreed, always responded to us with respect and looked for common ground. Frankly, I regard the noble Earl, Lord Howe, as the Conservative Government’s secret weapon because he certainly brings us to a common point that finds a way through when relatively few other people could.

I really want to thank others for the co-operative working across the House. We have worked closely with all those on the Labour Benches, but it has been with the Conservative Benches as well. It really shows this House at its best when it deals with issues of fundamental importance.

On my own team, Sarah Pughe in the Whips’ Office kept us co-ordinated; she also kept us informed, which was quite some challenge. My noble friends Lord Bruce, Lady Sheehan and Lady Tyler stepped in to contribute some special knowledge. I thank in particular my noble friends Lady Bowles, Lord Sharkey and Lord Oates, each of whom took on one of those three areas that I categorised as crucial in this Bill and brought to them absolutely exceptional levels of expertise, real dedication and hard work. They supported their positions with extraordinary diligence. Sometimes when people come with not only expertise but passion and concern, they can make an effective difference in the way they communicate with the House. I have to say to those three how much I appreciated them.

My noble friends Lady Bowles and Lord Sharkey are off at the Industry and Regulators Select Committee. I understand that the noble Lords, Lord Eatwell and Lord Blackwell, are there. I am sure they are missing the noble Baroness, Lady Noakes, today but I hope she will make that up at the next meeting and ensure that her imprint is on the work of that committee.

This has been a real pleasure. I believe we have achieved something. It is not all I would have wanted but, as I say, this is only the beginning of a long process.

[Baroness Coussins (CB)]

From these Benches, I too am grateful for the opportunity to express my thanks to all noble Lords who participated at all stages of the Bill. The noble Earl, Lord Howe, the noble Baroness, Lady Penn, and, from the point of view of my own particular interest in the Bill, especially the noble Lord, Lord True, have steered the Bill skilfully through your Lordships’ House. Although he is not in the Chamber at the moment, I place on record my grateful thanks to the noble Lord, Lord True, for his constructive engagement and for meeting me and the noble Baroness, Lady Morgan of Cotes, on two occasions to discuss amendments concerning the statutory debt repayment plans.

Together with the Bill team and the wider group of Treasury officials, the noble Lord, Lord True, has given me and the network of debt advice charities a great deal of confidence that these plans will be brought into effect in 2024. We are all grateful for this positive attitude. I thank all other noble Lords who spoke on this issue and on a variety of other matters of concern to consumers. As well as SDRPs, I welcome the fact that the Bill paves the way towards regulating buy now, pay later products, for example. Indeed, it has been very pleasing to see the level of consensus across the House on the need to improve support for people in financial difficulty and to tackle financial exclusion.

Finally, the passage of the Bill has been an important opportunity to look at what more needs doing on the financial services regulatory framework to ensure that it is as effective as possible at protecting consumers; for example, one area that was raised but ultimately found to be beyond the ambit of the Bill was oversight of bailiffs, but the commitment from the Government to work with stakeholders to develop this is very welcome.

I thank all concerned, including the excellent Lord Judd, whom we will all miss very much indeed.

[Earl Howe (Con)]

My Lords, I am grateful to all noble Lords for their remarks in bringing our proceedings to a conclusion. I beg to move.