Cathy Jamieson
Main Page: Cathy Jamieson (Labour (Co-op) - Kilmarnock and Loudoun)
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
On behalf of the Opposition, I support the Bill introduced by my hon. Friend the Member for Sheffield Central (Paul Blomfield). I was bemused by the claim from the hon. Member for Portsmouth North (Penny Mordaunt), who is no longer in her place, that the Opposition were trying to delay or talk the Bill out; nothing could be further from the truth. In all things this week, I hope I have been a model of restraint, and I intend to continue in that way this morning by making a brief intervention in support of the Bill in order to allow Back Benchers to contribute.
My hon. Friend gave an eloquent and thoughtful presentation of the Bill. It was interesting to hear him highlight the cross-party support for these measures, built on the growing consensus about what the key components of regulation ought to be. I hope the Minister heard that and took it on board. It was correct that she spoke at length, because it enabled her to lay out the issues, particularly around the summit she held and the other work undertaken. I hope she understands that, as my hon. Friend said, Citizens Advice, Which?, the Centre for Responsible Credit, the charity StepChange and the Centre for Labour and Social Studies—which have all published or given opinions on this issue—have highlighted the difficulties and issues faced by ordinary people who get involved in payday loans. He also paid tribute to the many people who give advice on debt locally. I add my congratulations to them on the work they are doing in difficult economic times, as they try their best to ensure that people have the correct information.
In introducing the Bill, my hon. Friend laid out the importance of the FCA’s role, which would not be as over-prescriptive as the Minister seemed to suggest. Rather, the FCA would give the direction of travel on key issues and set a clear framework. My hon. Friend did well in outlining those options to take the Bill forward, but also making it clear that he was open to further debate.
Mr Kevan Jones
Does my hon. Friend find it intriguing—indeed, it is quite inexplicable—that the Government are not prepared to allow the Bill to go into Committee to explore some of the issues she is articulating?
Cathy Jamieson
Indeed, and that is one of the points I wanted to make in response to what the Minister said. I know her to be someone who cares about what happens on this issue. To be fair, she has shown that since taking up her post, although I would not necessarily agree with everything she said this morning. Notwithstanding the fact that she said that she did not agree with the principle of the Bill, I suspect that, as an individual, she has some sympathy for what my hon. Friend the Member for Sheffield Central is trying to do. That is why I am somewhat surprised that the Government seem to be responding by not allowing the Bill to proceed to Committee, where there would be the opportunity to explore some of the information in much greater detail.
Barbara Keeley
Was my hon. Friend as surprised as I was to hear the Minister say that our hon. Friend the Member for Sheffield Central (Paul Blomfield) should “withdraw” his Bill? If the Government choose not to support it, that is one thing; if the Minister chooses not to support it, that is another. However, there is no sense in which this excellent Bill should be “withdrawn” by the Member introducing it.
Cathy Jamieson
My hon. Friend makes a valuable point. I, too, was slightly surprised to hear the Minister say that, because on the one hand she seemed to be engaging and listening to what people were saying—not only in this House, but externally—but on the other hand she was apparently closing down an opportunity to scrutinise the Bill in much more detail. I would be interested to see the Bill go into Committee so that we can look at some of those issues, particularly in relation to the FCA, where there might well be tensions. There might need to be some finessing, while other issues might need to be taken forward.
Ann McKechin
Does my hon. Friend agree that it should be for Parliament, which represents the electorate of this country, to indicate how it wishes the industry to be regulated, rather than leaving that completely to a bureaucrat?
Cathy Jamieson
I thank my hon. Friend for that intervention; I know her, too, to be someone who takes the issue seriously. She has done a lot of work on it. Indeed, this is such a high-profile issue—so many people are affected by it and so many external organisations are showing their concern or producing evidence, be they case studies or detailed research—that this would be an opportune moment to take the Bill forward and probe the issue further. The role of Parliament is important, and the fact that so many Members wish to speak this morning shows that there is further scope to debate the Bill in Committee, which is what I would certainly like to happen.
Jacob Rees-Mogg
It concerns me that the Bill would give too much flexibility to the FCA and allow it too much arbitrary power. This House should be concerned about that issue on Second Reading.
Cathy Jamieson
I hear what the hon. Gentleman is saying, but I would have thought—again, because I know him to be someone who would take a great deal of care and consideration looking at the detail of the Bill in Committee—that, with his intellect and interest in these matters, he would have been an asset to any Committee that wished to consider the matter further.
I am surprised and rather disappointed. The Minister herself raised issues about advertising and she seemed to be in agreement in principle with many of the provisions about how lenders should be obliged—although I think she suggested voluntary measures, and I am not sure that that would work—clearly to display the interest payable in cash terms. That is important so that consumers know exactly the position they would be in and could compare the costs of borrowing. The Bill would allow that consistent approach to be determined by the Financial Conduct Authority.
As I said, and as seen in contributions by hon. Members and the Minister, advertising is an important issue. We have probably all received some of these text adverts attempting to make us believe that we are somehow entitled to take out a payment protection insurance claim and that there is £500 or £800 just sitting there waiting for us to claim it at that very moment—if only we would text back. We have to look further at that issue.
We have that advertising in the background all the time—we see it when we are on the tube, on the bus, on the high street and, increasingly, on websites and the internet, if not on our own phones. The significance is that it seems to normalise the issue—as if it is perfectly normal for people to take out all these loans and as if there is nothing to be concerned about with them. As I say, it normalises that behaviour.
We heard the Minister talk about the affordability and cost of credit, and we heard the hon. Member for East Hampshire (Damian Hinds) address some of the concerns raised about the dangers of interest caps. He described them as a blunt instrument, and he spoke about how a market for new products can emerge. The issues that the hon. Gentleman raised could be explored further in Committee. His points about the role of the mainstream banks were important, too. He referred to the charging regime and to the need for the so-called jam jar accounts. When some people cannot access or have difficulty accessing a basic bank account, it makes it extremely difficult for them to consider saving. He highlighted the importance of financial education and the credit unions to encourage saving, but the harsh reality is that it is simply not possible for many people on low pay to have the financial resilience to save. If a child needs a pair of shoes or a school trip comes up, or something unexpectedly goes wrong in the home, they might have to use the little savings they have, making it extremely difficult for them to get back on track. The credit union movement has a great opportunity to develop new products.
My hon. Friend the Member for Sheffield Central spoke clearly about debt collection and the problems that can arise with the continuous payment authority and customers. Sometimes amounts have been withdrawn without due notice given, which can lead to a very difficult set of circumstances, perhaps leading to other bills going unpaid.
The Bill as drafted would ensure that lenders had to signpost customers to free and impartial advice when they were turned down for a loan or when they were having difficulties with payments or defaults or if a continuous payment authority failed. That is important. The Bill would ensure, too, that the FCA would be able to determine the enforcement powers to be used for breaches of the legislation. Again, I view that as an important issue. I heard the Minister talk about the need to have everyone together and to have the code of conduct encapsulated in the provisions. It was almost as if the bad companies or those that would not adhere to the rules would somehow fall off the end of the world. Unfortunately, that is not necessarily the case, and enforcement is particularly important.
I said at the outset that I did not want to take a huge amount of time, but I wanted to indicate support for the Bill. My hon. Friend the Member for Sheffield Central and the Members of all parties who have worked with him have introduced an important Bill that should be scrutinised in more detail. There is no doubt that it could be improved through debate and discussion in Committee, with the comments of all the external agencies taken on board. I am disappointed that the Minister has not seen fit to support it, and it would be disappointing if it were talked out or the House did not support Second Reading. I urge Members to give my hon. Friend and those who have sponsored the Bill their support by ensuring that it proceeds to the next stage.