Gareth Thomas
Main Page: Gareth Thomas (Labour (Co-op) - Harrow West)Department Debates - View all Gareth Thomas's debates with the HM Treasury
(10 years, 1 month ago)
Commons ChamberI am grateful to you, Mr Deputy Speaker, and to my hon. Friend the Member for Edmonton (Mr Love) and, indeed, to the Economic Secretary for allowing me to contribute to this brief debate. The Economic Secretary is a Minister of particular intelligence and sophistication, and I hope as a result she will be sympathetic to my hon. Friend’s request for clarity on whether the Financial Conduct Authority and, behind it, the Treasury and the Bank of England are really using the data on lending patterns that are being disclosed in order to identify the credit deserts across the UK which clearly exist.
One lesson from the United States, where similar disclosure of lending data takes place, is just how important the data are in identifying where credit unions or community banks—the community development financial institutions to which my hon. Friend referred—can help to plug the gaps. If the FCA or the Bank of England look with vigour at the lessons that can be learned from the data, that might help steer the work of the credit union expansion project being undertaken by the Department for Work and Pensions and the efforts of local enterprise partnerships to support CDFIs in plugging the lending gaps.
I support my hon. Friend in all the different points he made and urge the Minister to press the FCA to undertake open and rigorous scrutiny of the data following the forthcoming second disclosure, so that we can begin to get a sense of the emerging patterns and as a result better direct our resources to drive the expansion of alternative sources of lending in the credit deserts.
Yes, the Government are keeping the matter under review, and we will discuss exactly that with the BBA.
The hon. Gentleman expressed concern that postcode lending data do not give a full picture of lending in the UK, and suggested that a wider set of lenders and products might be included. For example, he noted that SME figures represent about 60% of the national market, covering loans and overdrafts only. Other forms of finance, such as business credit cards and asset-based finance, are not included at this stage. He is therefore right that it is important for public data to be as broad as possible, but as I have mentioned, we must bear in mind that, particularly for smaller institutions, the cost of making such disclosure might be prohibitive and might increase the costs passed on to customers and businesses. It is important to see postcode data as part of a wide range of data to which the Government, banks and businesses have access, on top of data from the Bank of England, the BBA and other surveys.
Those other surveys, including the SME Finance Monitor and the new Business Banking Insight, can also be of real importance. The latter, which the Government announced in the Budget and I launched just over a month ago, is a really useful tool for UK businesses, as it lets them see which banks are in a good place to offer them the products and services they need at the right prices and will give them a decent service in their area and their particular market.
Finally, the hon. Gentleman asked what use the Government are making of the data on bank lending and whether we have a clear strategy for tackling any credit deserts in UK communities; the hon. Member for Harrow West also raised that issue. I reassure them both that the Government regularly interrogate these data as part of our wider analysis of bank lending conditions across the UK. However, the full usefulness of the data will only really be known once we have been able to identify longer-term series and trends.
At the current time, the data do not appear to show any regional imbalances, but we will continue to monitor that. As the dataset grows and trends become more readily identifiable, we plan to make increasing use of the data. We will of course take action on the issue if we think it is needed.
Will the Minister give us a little more clarity on who is analysing the trends? I ask, having asked the Financial Inclusion Centre specifically to give me a sense of the bank lending data for London; its analysis suggested that there was a wide disparity among different postcodes—potentially 50% to 300% of the average per capita lending per postcode. As my hon. Friend the Member for Edmonton mentioned, my sense was that there was a need for one particular organisation to analyse those data.
As I have said, at the current time the data do not seem to show any major regional imbalances, but my officials, the Bank of England, the BBA and the banks themselves are looking at the data. If the hon. Gentleman wants to write to me on a specific point where he believes that there may be evidence of a distinct imbalance I would be delighted to look into it and respond to him. We will continue to monitor the data and ensure that as trends become more identifiable we can make more use of the data to assess potential areas where there is a lack of banking facilities.
In conclusion—