Oral Answers to Questions

Debate between Esther McVey and Damian Hinds

Monday 28th February 2022 Commons Chamber

[Esther McVey (Tatton) (Con)]

Constituents in Tatton are increasingly concerned about the growing number and range of online fraud and scams, and the ability of Action Fraud to deal with them. Many of those crimes originate outside the UK, with some from hostile states such as Russia. What is the Minister doing to counter that?

[Damian Hinds]

My right hon. Friend is right, and we share her constituents’ concern. We are looking constantly to upgrade and improve Action Fraud, and I encourage her constituents to carry on reporting those instances of fraud. Together with the rest of our constituents, their forwarding of dodgy emails to [e-mail] has so far led to 73,000 scams being removed.

Oral Answers to Questions

Debate between Esther McVey and Damian Hinds

Monday 4th February 2019 Commons Chamber

[Ms Esther McVey (Tatton) (Con)]

Will the Secretary of State look again at school funding in rural areas, particularly Cheshire, and push for further funding at the spending review? Will he commit to come to Tatton, to meet some of my headteachers?

[Damian Hinds]

I am conscious of the issues around rural and smaller schools. We have made adjustments for that in the national funding formula, but I am happy to visit Tatton and meet some headteachers.

Oral Answers to Questions

Debate between Esther McVey and Damian Hinds

Monday 31st March 2014 Commons Chamber

[Esther McVey]

I would like to have a word with the young chap you are talking about, because I would like to give him hope and optimism, which is something that you are distinctly not giving—[Interruption.] I apologise, Mr Speaker. I do not mean your good self: I mean the hon. Gentleman. That young chap needs hope and optimism, and he needs to know what is happening in the rest of the country, because other people are getting jobs. Youth unemployment—including long-term unemployment—has gone down, and if the young chap sticks with it and gives it a go, he will get there in the end. That is the best news that I can give him. It is far better under this Government than it was under the Labour Government, when youth unemployment went up by 45%.

[Damian Hinds (East Hampshire) (Con)]

5. What steps his Department is taking to promote financial inclusion and to help families to budget.

Jam Jar Bank Accounts

Debate between Esther McVey and Damian Hinds

Tuesday 28th February 2012 Westminster Hall

[Damian Hinds]

My hon. Friend goes right to the heart of the matter. There can also be a feeling of being rather flush on payday and a danger of people not making provision for unexpected, or sometimes even expected and known, subsequent liabilities.

Although most of us enjoy free in-credit banking, nothing in life is free; there is a cost to operating bank accounts. The point made by my hon. Friend the Member for North Swindon (Justin Tomlinson) also goes to the heart of that issue. The provision of free banking relies on people making mistakes and incurring penalty charges. Research for the financial inclusion taskforce has shown that low-income families that move to have a bank account in order to save money through direct debits and so on found that those savings were entirely wiped out by penalty charges, which averaged £140 in the first year. That combination of factors, as my hon. Friend says, can lead to people tripping into debt, which can then spiral. I mentioned people who do not have a transactional bank account, but many choose to manage in cash even if they have a bank account.

[Esther McVey (Wirral West) (Con)]

My hon. Friend talked about people tripping into debt. He will also find that people trip into ill health, particularly mental ill health. I work with Advocacy in Wirral, and one of the main issues that it deals with is the sheer practicalities of life and not being able to pay bills, leading to a deterioration of mental health.

[Damian Hinds]

My hon. Friend’s point is, as ever, apt and to the point. She could also have mentioned the stress that debt and trying to manage one’s finances can bring to families, which is one of the key factors in family breakdown.

To address those points—at least in part—and a few other points, we have jam jar accounts. They mimic the jam jars on the windowsill; that is the whole point of such accounts. Louise Savell of Social Finance has identified three core features. First, when someone’s wages come in, the money is automatically distributed among different pots within the bank account—for rent, household bills, spending money, savings and so on. Secondly, the person would receive a low balance alert by text, if there is a danger of that person failing to meet one of their bills from the bills account. Thirdly, if the person does not act on that for whatever reason, there would be an auto-sweep from savings into the bill-paying account in order to avoid penalty charges or failing to make the payment.

There are a number of questions about product design, which can be done in different ways. One big debate is about budgeting support, which could accompany the accounts. Comprehensive budgeting support—helping people to decide how much goes into each pot and how and when to redistribute—would be a great bonus, but that is quite costly. The issue should have a separate debate, because we can have a lot of the benefits from jam jar accounts without fully comprehensive budgeting support, and we can have a lot of great benefits from fully comprehensive budgeting support without jam jar accounts.

A second question about product design is how easy we make it to raid a savings account. Jam jar accounts are in many ways a method for one to impose discipline on oneself. A customer might decide that it would be good to impose further discipline and say, “If I want to move money out of the savings account into the spending account, I should have to do something actively. Ultimately, it is my choice because it is my money, but I will make myself ask for it in writing or by e-mail.”

--- Later in debate ---

[Damian Hinds]

My hon. Friend makes a fine point, and I commend him on his leadership in the local banking movement. I will say a few things about credit unions, which I think share some characteristics.

I have talked about the “Why?” of jam jar accounts, and it is also fair to ask, “Why now?” There are three good reasons why the issue is particularly relevant at the moment. First, the Government and Members on both sides of the House are focusing, rightly, on the cost of living. We discussed heating bills in the preceding debate, and there are active debates about rail fares and petrol and diesel costs. Bank charges are also a significant part of the cost of living. The second reason why the debate is particularly timely is because of the introduction of universal credit, the move from fortnightly to monthly payments, and the move away from direct payments to landlords. The third reason is the sector modernisation fund of £73 million for credit unions that the Government are supporting. That presents new opportunities for development in that sector.

[Esther McVey]

Of course I greatly welcome—as all of us here do—the universal credit, but does my hon. Friend agree that what is being offered protects not only those receiving the credit, but potentially the landlords and other people who are the recipients of bill payments? Those people also need protection.

[Damian Hinds]

My hon. Friend is right. Of course, there is a potential benefit for landlords and other service providers. There is a line of argument that goes: why not just keep the two-weekly payments and the direct payments to landlords? However, a key objective of universal credit is to make the receipt of benefit feel more like being in work, which usually means having to cope with monthly payments, not having money paid direct to a landlord and so on. The use of such accounts is a good way of helping people through that, which is a perfectly legitimate aim, while keeping the key features of universal credit.

We know that Ministers are interested in this area. Most recently, in answer to a written parliamentary question tabled by my hon. Friend the Member for North Swindon, which was published after I applied for the debate, the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), confirmed that the Government are actively looking at the potential for low-cost budgeting accounts.

So why do they not exist already? Well they sort of do, just not on a particularly big scale. Last year, there were four providers of jam jar accounts, although three of them are not the household names that most of us would recognise. Until now, a key driver for the development and roll out of such accounts has been debt management companies wanting to have greater security of payment schedule, rather than consumer advertising. So although they exist, they do not exist at scale. Social Finance estimates that there are only about 150,000 such accounts in the UK. They do not exist through big brand institutions—by the way, the exception to that is the Royal Bank of Scotland. I know that it is not very fashionable these days to say nice things about RBS, but I commend it for having such an account, which it uses for its most challenging customers. However, that also means that the account is not actively marketed to the general public. Someone would struggle to walk into an RBS branch and open such an account, unless they are referred on to it.

Social Mobility

Debate between Esther McVey and Damian Hinds

Tuesday 31st January 2012 Westminster Hall

[Esther McVey]

I do indeed believe that self confidence is crucial. In fact, I led a debate on confidence for girls in particular. There is a lot of evidence, both academic and from Ofsted, that we need to encourage that, which is why I am so impressed with our national citizenship service in which kids from all backgrounds come together to get involved in team play and outdoor pursuits. The 30 children from the Wirral who participated last year said that it was a life-changing experience and that it really boosted their confidence. Yes, confidence needs to be developed both inside and outside school.

We need to look at social mobility as a whole and consider the various interventions that can be made over a life cycle. I welcome the fact that the social justice agenda and the social mobility agenda have come together with an emphasis on fairness and life fairness. Family support and support growing up are crucial.

The Department for Communities and Local Government found that 120,000 families in England have complex social, health and economic problems and it has designated an early family intervention programme. Yes, I know that it will cost £448 million to support such families, but it is in an attempt to break up a never-ending cycle of dependency and under-achievement that ultimately costs the country £9 billion a year. We therefore have not only the evidence to show that we need to take up such a programme to help the lives of people, which so often can be forgotten when we look at numbers, but the economic imperative to ensure that we push it through.

[Damian Hinds (East Hampshire) (Con)]

Does my hon. Friend agree that even beyond the 120,000 most troubled families throughout our society, the gap between rich and poor appears by the age three, which puts into sharp relief the need for support for parenting in the family?

[Esther McVey]

I totally agree with my hon. Friend. The coalition Government are right to introduce new nursery care for toddlers. There will be 15 hours of free early education a week for all two-year-olds from poor homes, which will help 240,000 disadvantaged children. The pupil premium for disadvantaged children in England’s schools will be worth £600 per pupil per year.

Today, I want to dwell on the sciences not just because the Minister for Universities and Science is present but because it is a passion of mine. An education in the sciences can promote social mobility. As chair of the Chemical Industries Association, I hear on a daily basis about the need for more science students, technicians, engineers and scientists. The jobs are there, but we do not have the children to fill them. Moreover, they are high-paying, life-long jobs with futures. Only last week, I was promoting science in schools with the Chemical Industry Education Centre and one of the companies present admitted that it had taken on 10 post-graduate chemistry places, and, sadly, only one of them went to somebody from the UK—such is the lack of those in the UK with suitable qualifications.

I hear such stories on a weekly and even a daily basis. People comment not just about what is happening on the jobs front but about science education itself. David Braben, who is known for computer games such as Elite and Rollercoaster Tycoon, said:

“We have become a nation of consumers rather than creators in terms of technology in education, and this has implications further down the line.”

Eric Schmidt of Google had a withering summation of the British system, saying that it has forgone teaching computer programmes in schools. He said:

“I was flabbergasted to learn that today computer science isn’t even taught as standard in UK schools...Your IT curriculum focuses on teaching how to use software, but gives no insight into how it’s made.”

The president of the Institute of Electrical and Electronic Engineers, Moshe Kam, said that there were systematic failures in the UK education system, which has serious knock-on effects for the economy.

The fact that our nation, which created and advanced the computer, has now become a nation of consumers is absolutely outrageous. Therefore, how we teach the subject is vital, which is why I welcome the determination of the Secretary of State for Education to have five core subjects taught to everyone in school. We have to start off by pushing five core subjects to everybody from every background, and not just to those who come from a slightly wiser professional background. There must be an imperative in the school system.