Oral Answers to Questions

Damian Hinds Excerpts

Tuesday 1st November 2011 Commons Chamber

[Miss Smith]

I will tell the hon. Lady what I am certainly going to do about it, which is join the rest of this Government in working on welfare reform, tax reform, child care reform and many other measures that will take women’s unemployment down from its record level, where her Government left it.

[Damian Hinds (East Hampshire) (Con)]

5. What recent estimate he has made of the size of the structural deficit.

[The Chancellor of the Exchequer (Mr George Osborne)]

The estimate is that the structural deficit for this year will be 5.3% of GDP, which is down from the record 8.9% in the last year of the previous Government, with it having been the highest in the G7 before the crisis. Of course, these estimates are now provided independently by the Office for Budget Responsibility, rather than being fiddled by the close advisers of the Chancellor and the Prime Minister, as used to happen.

[Damian Hinds]

Other countries face fierce criticism for their tardiness in addressing not only their immediate deficit, but their growing medium and long-term liabilities. How is progress in that regard for the British Government?

[Mr Osborne]

We are bringing the deficit down from the record levels that we inherited, which has in part provided stability in the financial markets for sterling and our interest rates. That has been absolutely crucial, as we can see in the very high interest rates faced by not just Greece and Portugal, but now even by countries such as Italy and France, which face significantly higher interest rates than we do. That is of course a huge boost to the British economy.

Finance (No. 3) Bill

Damian Hinds Excerpts

Monday 4th July 2011 Commons Chamber

[Mrs Chapman]

All those steps are very welcome, but they do not go very far at all in addressing the fundamental issue. The Competition Commission says that what the OFT wants to do is nothing like enough. I understand the hon. Gentleman’s intention: it is to give the Government a background against which they can decide not to support this new clause, but we are trying to force this issue to the fore and get something done about it. We are all for cross-party consensus—that is wonderful when it can be achieved—but what we actually want is something to be done. I hope the hon. Gentleman will therefore forgive Opposition Members if we are sometimes slightly intemperate in the way we express our views on this issue.

As I said when talking about my ten-minute rule Bill, for me the key issue is the advertising of these products, which is irresponsible. It might be argued that people are being given a choice, but people are not making that choice on value-for-money grounds. They are not shopping around. They are not thinking, “What’s the best product for me?” They are instead thinking, “What will get me an answer to my problem as quickly as possible, and who will say yes to me? I don’t want to go to the bank and be told ‘No’ or ‘You can’t have this but you can have something else and do you want to make an appointment to come back next week?’” These people have very immediate financial difficulties, and these products are deliberately targeted at them.

[Damian Hinds (East Hampshire) (Con)]

First, may I apologise for missing some of the earlier speeches?

I have a great deal of sympathy with much of what the hon. Lady has said, but the fact that these companies have high costs and in particular high marketing costs, and the fact that there is no evidence that consumers are making rational choices based on which is more or less expensive, suggests that taxation is not the answer to the problem. There may well be an answer to the problem, but hiking up taxes is almost certainly not it.

[Mrs Chapman]

The new clause does not only address taxation. The hon. Gentleman should read it thoroughly, as it talks about other measures too. I do not think there is any one measure alone that will address this problem; there will have to be a package of measures.

There is no real competition in this market, as there are only a few companies in it. On Friday my attention was drawn to a company operating in the north-east called Provident. I was very disturbed to hear that last Christmas Provident representatives were going door to door deliberately targeting single mothers—as members of political parties, we all know that can be done. Its representatives were knocking on doors just before Christmas, saying, “We can offer you £500 and you don’t have to pay it back until after Christmas.” They were saying it could be paid back in a number of easy payments, thus making it seem attractive and ordinary. That is completely exploitative, and it will happen again this year unless the Government do something about it; indeed, it will happen Christmas after Christmas after Christmas. This House should neither accept nor tolerate that.

All Opposition Members are big supporters of credit unions.

--- Later in debate ---

[Yvonne Fovargue]

At any one time there are 5 million to 7 million people in this country who are unbanked or who do not have a credit history. In the main, they are the people who turn to high-cost lenders, because they do not have a credit history and they have nowhere else to go. Personal debt is rising, with 46% struggling until pay day, up 8% this year. Again, they are the people turning to the payday lenders.

I take issue with the claim that the rate has grown in the last decade. When I started in the advice field 20 years ago, there was one high-cost lender, Provident, which targeted a specific market. Provident went round the estates, using neighbours and talking to people. The company would go in—here I also take issue with the claim that people use the money on luxuries—and find people who needed to replace their broken cooker. The neighbour would come in, look at the cooker and say, “Oh yes, I can lend you that money.” When the loan was nearly repaid, Provident would come back and say, “Tell you what, your sofa’s looking a bit shabby. It won’t cost you much more to get a sofa,” and people would get trapped in a cycle of debt. However, in one respect, Provident was reasonably easy to deal with, because there was one company with a specific target group. It was possible to go round and talk to individuals, target schools and visit the residents groups that the people concerned attended. It is much more difficult now. The explosion of advertising and the normalisation of the process have made it so much more difficult to control the market and tell people what the dangers are.

I had a constituent come to me in February, as soon as he realised my interest in the subject. He could not quite manage to the end of the month—I think his car tax was due—and he had taken out a payday loan. The company immediately took the payment and the interest out of his bank account the next month. He realised that he could not get to the end of that month either, so he took out another payday loan. That carried on and in the end he had 10 payday loans and all his salary was being taken from his bank account. That was a man who was working. Such companies are supposed to check that people can afford to pay the money back and that they do not have other credit, but that did not happen in this case. For such companies, self-regulation absolutely is not working. That company was not an illegal loan shark: it was a legal company and it did not threaten to break the man’s legs, but it left him in a cycle of stress and depression that he found very hard to get out of.

I am also concerned about the double whammy that these companies are operating, as many of the companies that put people into debt are opening debt-management arms to get people out of debt as well. When the financial inclusion fund was finishing last year, those companies were circling like sharks. I cannot tell hon. Members how many companies contacted me basically gloating and saying, “There will be no, or very limited, free debt advice, so people will have to turn to us and you will have to deal with us now.”

I welcome the Money Advice Service because any advice on budgeting is welcome, but that service does not replace face-to-face debt advice. There is a need for that kind of service to be available—and more freely available than it is now. People have what I call behind-the-clock syndrome. They get into debt and cannot face opening the letter about their debt so they put it behind the clock. When they get the next letter, that also goes behind the clock. I cannot tell hon. Members the number of people who used to come into the bureau with a carrier bag whom I would look at and think, “They are in debt”. They would have a carrier bag full of letters that they could not face opening. People are not going to deal with a telephone or online service if they cannot even open a letter. There is a need for free, impartial, face-to-face debt advice and for regulation of debt management companies. Self-regulation is not working. It did not work in America, and when America regulated, those companies started coming over here because they like what they see.

[Damian Hinds]

Does the hon. Lady agree that while the availability and accessibility of free debt advice are important, visibility is also important? When people do get around to opening letters and starting to seek help, if they search on internet search engines for debt advice, Citizens Advice and the Consumer Credit Counselling Service ought to come at the top of the list even though they cannot afford to compete with debt management companies on pay-per-click rates. Should we not exhort Google and others to make sure that those services are duly highlighted?

[Yvonne Fovargue]

I think that is an excellent suggestion, but there also have to be appointments available when people need them. It is no use searching for citizens advice bureaux if appointments are not available for six to eight weeks because funding to provide the very specialist advice that is needed has dried up. We have to make sure, first, that people get information about where they can go, and, secondly, that appointments are available.

Regulation of debt management companies is needed. They come at the top of Google and other search engines on the basis that they will be going out of business in two years’ time anyway, so they might as well make as much money as possible by charging up-front fees and charging as much as they can. If they do go bust, as two have recently, it does not really matter to them. I had a client come to me who had been paying £40 a month to a debt management agency for 18 months, at the end of which he owed his creditors more than when he had started. Those companies need to be regulated.

The new clause is one of the range of measures we need. We have to keep this issue high on the agenda because the longer we leave it, the more people will go to high-cost lenders and debt management companies and the more people will get themselves into a spiral of unaffordable debt. We have to act now. It is no use leaving this for another five or six months—how many thousands more will have got themselves into debt in that time?

--- Later in debate ---

[Sheila Gilmore]

Indeed. On Saturday, I was at just such a festival in my constituency. It was a beautiful day—the first sunny Saturday for some time. Volunteers from Castle credit union, who help to keep it going, were there for exactly the reasons the hon. Gentleman suggests. However, if, unlike credit unions, high-cost lenders have a high street presence—extremely attractive, brightly lit and hardly missable—it is much easier for people to find them.

Regrettably, only 2 % of people in the UK are members of a credit union. We can all work harder to increase that number, but one thing that would clearly help would be real resources to build the movement. Experience in my city is that real resources, far from being put in, are declining, and there are even fewer members. Despite the efforts of the volunteers who man stalls at local fairs and festivals, credit unions are not providing the competition we want with high-cost lenders. I should dearly like people to use credit unions instead of those institutions.

I understand that this is politics, but when Opposition Members make proposals we meet the accusation that Labour should have done things over the past 13 years, and it is suggested that the fact we did not debars our making proposals and expecting them to be listened to. I am sure that if my hon. Friend the Member for Walthamstow had been a Member during our period in government, she would have been harrying Ministers in exactly the same way as she has harried the Government over the past year. She would not have been afraid to speak.

We should not accept too lightly the suggestion that the previous Government did not look seriously at financial inclusion. The present Government say that they are interested in it too, but they do not put in the means to make it happen. It is not good enough to say they are interested. In my Westminster Hall debate, I referred to our manifesto proposal to oblige banks to provide basic bank accounts. The Minister’s response was, “Oh, we don’t really want that sort of regulation. We want it to be voluntary and we want to work with banks.” That is all too often the Government’s response. They say they want the ends, but they are not prepared to put in the means.

The previous Government did a lot of work on financial inclusion, but no one thing is enough: credit unions will not do it; basic bank accounts will not do it; and taking action against high-cost lenders alone will not do it. We need a range of measures.

Some of the steps that would help have been positively stopped by the Government. The growth fund, which helped to boost credit unions and other community-based financial institutions, has not been renewed or extended.

[Damian Hinds]

Is the hon. Lady aware of the modernisation fund of up to £73 million?

[Sheila Gilmore]

I might be wrong, but I understand that the fund is not a substitute for the money that was available through the growth fund. When it was introduced, it was hoped that banks would lend to community-based lending organisations; they have not done so, yet high-cost lenders can get finance to expand their businesses to make them attractive.

Financial Mutuals

Damian Hinds Excerpts

Wednesday 16th February 2011 Westminster Hall

[Mr Hoban]

The best route for resolving this is through the response to the consultation paper, which the FSA will publish later this year. It is for the FSA to decide whether or not it should disclose legal opinions, because it is an independent regulator. The consultation paper is an important way in which to resolve these issues.

I was talking about the need to create a modernised legislative framework for mutuals, and capital is part of that. The Government are also implementing legislation to allow mutuals to modernise the way in which they communicate with their members and to enable them to prosper. The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2010 has been a long time coming. It will be re-laid before Parliament next month and will introduce many quite basic, yet far-reaching reforms that will enable credit unions to modernise and grow.

[Damian Hinds (East Hampshire) (Con)]

Will the Minister give way?

[Mr Hoban]

I know that my hon. Friend, as chairman of the all-party parliamentary group on credit unions, will have a great deal to say on this matter, but may I just finish my point? I may even be able to answer his intervention before he makes it.

One of the biggest changes will be to allow credit unions to admit corporate bodies to their membership. Those new members will be able to deposit in and borrow from their local credit union, which provides opportunities for investment and growth in communities. Alongside that, various deregulatory measures relax the rules on age limits for memberships, year-end dates and the ability to offer interest on deposits. These proposals should increase the appeal of local credit unions to the local community and increase their steadily expanding membership still further.

[Damian Hinds]

Many of us are waiting with excited anticipation for the legislative reform order. What expanded role does the Minister see credit unions potentially playing as a result of the changes in the legislative reform order both in a big society context and in encouraging enterprise because of being able to work with corporate bodies as well as individuals?

[Mr Hoban]

It would be a way for credit unions to make the greatest opportunity of this. We are trying to open up more possibilities for the financial and mutual sector through a number of our measures. I go back to the debate about capital. One of the challenges that I put to the building society sector and others is that if it had the opportunity to raise more capital, what would it do with it. How would it benefit more people as a consequence of having that flexibility? I say to my hon. Friend that corporate members could include charities and voluntary groups, and their deposits could help credit unions to expand their base, so that they can lend more to local communities. There is an opportunity there for the voluntary service to help expand that base. That will also help to create a much more viable credit union sector. Like me, my hon. Friend will have had conversations with Mark Lyonette, who wants to make sure that we move the credit union sector on to a much more stable and viable footing, enabling it to take deposits from others and pay interest on them.

Oral Answers to Questions

Damian Hinds Excerpts

Tuesday 21st December 2010 Commons Chamber

[Mr Osborne]

The Prime Minister explained from this Dispatch Box that the cuts in his constituency are considerably greater than the cuts in the Leader of the Opposition’s constituency. Our reforms give local government greater control over budgets, but let me make another observation. Local government is responsible for a quarter of all Government spending. Labour proposed £44 billion of expenditure cuts. If Opposition Members are saying that they would not include local government in those proposals, they are less credible than I thought they were.

[Damian Hinds (East Hampshire) (Con)]

T2. The anticipated provident societies and credit unions legislative reform order will bring great advantages to credit unions, including the ability to pay fixed interest on savings and to offer services to community groups, social enterprises and companies, but it has been rather a long time in coming. Will my hon. Friend update the House on the expected arrival date of that LRO?

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

My hon. Friend takes a close interest in that matter as chairman of the all-party group on credit unions, a position he took over from the hon. Member for Bristol East (Kerry McCarthy). He is right that that LRO will bring significant benefits to credit unions. Following comments by the relevant parliamentary Committees that scrutinised the draft laid by the previous Government, amendments need to be made, and I hope to lay the amended regulations in late January or early February.

Economic Affairs and Work and Pensions

Damian Hinds Excerpts

Tuesday 8th June 2010 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

Thank you for allowing me to catch your eye, Mr Deputy Speaker. It is an enormous privilege to address the House for the first time. The trepidation that I had already has been greatly enhanced by having to follow so many of my hon. Friends and Opposition Members.

I begin by expressing my appreciation for my predecessor, the right hon. Michael Mates. On his election in 1974, as MP for the then Petersfield constituency, he was about the age that I am now, but he had already served Queen and country for 20 years in the Army. He went on to serve in the House for a further 36 years. His well deserved reputation as a champion of the people of East Hampshire and his service as a Minister of the Crown and as a Select Committee Chairman cast a very long shadow, in the penumbra of which I stand rather hesitantly today. If ever, in this House, I can be half as good as he was, I shall be not half bad.

I very much hope to emulate Michael Mates’s long and close relationship with the people of East Hampshire, and there are many people whom I have the privilege to represent now who have been transported into my constituency, courtesy of the Boundary Commission, having taken no decision of their own to do so. They have been served well by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot). The House will be familiar with his exemplary service and so I shall not affront his modesty now. Suffice it to say that I aim to ensure that the residents of Bordon, Liphook, Grayshott, Selborne, Headley and Headley Down will not be found gazing wistfully across the constituency boundary. I shall do my best to serve them as well as they have rightly come to expect.

The constituency of East Hampshire is England at its very best, with its varied and enchanting landscape, historic market towns and many beautiful villages. One such village is Chawton, where Jane Austen found such inspiration and created most memorable characters and images that show our country at its most cherished. But that tranquillity has at times been rather violently disrupted. Should I ever require a reminder of the need to remain in harmony with my constituents, it is there in the bullet holes in the door of St Lawrence’s church, close to our family home in Alton, for that was the site of the civil war battle of Alton. On that occasion, it took 5,000 parliamentarians to match up to the local men.

Today, East Hampshire is, I am pleased to say, once again a harmonious place, but challenges still exist. We need houses that local people can afford, but we need to resist the sort of overdevelopment that can spoil the character of an area. It is vital to provide jobs locally and to keep the micro-economies of our towns and villages vibrant for our local heart and soul. Looking forward, the opening of the Hindhead tunnel, the various options for the future of Bordon and the advent of the South Downs national park all present both new opportunities and new challenges.

In my constituency, particularly in Bordon, we are proud to be home to so many who serve in our armed forces. They are a constant credit to our nation and our commitment to them in this House must measure up to their commitment to serve our country. I welcome the Government’s pledge to renew the military covenant and I look forward to seeing that as a priority in the business of the House.

After the defence of our country and our security, perhaps the biggest battle we face is ensuring that we further define and bolster Britain’s place in the new world economy. As the new powerhouses of China, India, Russia and Brazil loom ever larger, we must rise to the challenge they set. Fundamental to that must be ensuring the very best education for every child to enable them all, regardless of background, to fulfil their potential. That is a theme that many hon. Members have touched on already. Striving for excellence is not just about bringing all up to scratch or setting the bar at an acceptable standard. It must be about encouraging all to stretch themselves, from wherever they start, to be all that they can. That should be true both for schools and for the students in their care. In education, as in industry, when people feel ownership, empowerment and responsibility, they are much more likely to go the extra mile and make a success of their venture—hence the great attraction of the academy model, even for schools that are already very successful.

Those same principles need not mean going it alone, as they can extend beyond the school gate, with schools working in partnership with others. In my constituency, the 44 schools and colleges already work co-operatively, choosing to pool resources in the pursuit of shared goals. The potential advantages of that kind of approach are manifold. It can enable smaller village schools, which we value very highly in my area, to derive scale benefits that they otherwise would not have. It can provide new stretch opportunities for particularly gifted and talented youngsters, and also a forum for governors to share best practice.

My right hon. Friend the Secretary of State for Work and Pensions has outlined bold plans to help tackle the problem of people being trapped in the welfare system, but I am sure that he would agree that even better than cure is when we can go for prevention. The oft-quoted number of NEETS—people not in education, employment or training—is such a bland statistic, but it masks so much wasted potential. It is often said, too, that one can spot the people likely to end up adding to that statistic from a very early age. That is too often remarked on, but too rarely acted on.

We must have ambition for all our young people, and the pupil premium that my right hon. Friend the Secretary of State for Education is putting forward will be a big part of that. I hope too that more areas will follow the model of the East Hampshire Partnership, for which a key focus is identifying the people who may be at risk of falling into that group, and working together across the age groups for their benefit.

Mr Deputy Speaker, thank you for allowing me the chance to speak.