Mortgage and Rental Costs

Debate between Gareth Thomas and John Glen

Tuesday 27th June 2023 Commons Chamber

[The Chief Secretary to the Treasury (John Glen)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the Government’s drive to halve inflation, grow the economy and reduce debt; particularly welcomes the Government’s new Mortgage Charter which has been agreed by 85 per cent of the residential mortgage market and will provide support to mortgage holders through new commitments and flexibilities to help borrowers who are anxious about rising interest rates; notes the extensive package of cost of living support to help families with rising prices, worth an average of £3,300 per household including direct cash payments to the eight million most vulnerable households; and further believes that Labour’s policies to manage the economy would be inflationary, lead to higher interest rates and put more pressure on mortgage holders and renters.”

After two decades of low inflation, the world has been confronted with a bout of fast-growing prices, and we are not alone. As a result of rising prices, central banks around the world, including in the United States, Japan, New Zealand and the European Union, have been raising interest rates in order to force down the rate of price rises. As all Members will be aware, last week, the Bank of England’s independent Monetary Policy Committee raised rates to 5%. Let me say at the outset that the Bank of England and its Monetary Policy Committee has the full support and confidence of this Government, and will continue to do so as it takes whatever action is necessary to return inflation to the 2% target in the medium term. As the Chancellor was clear when addressing this place yesterday, he will not take action that undermines the Bank of England’s monetary objectives.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The Minister will be aware that the latest data on mortgage rates specifically shows that, since the mini-Budget, they have increased faster here in the UK than in the US. That gap in mortgage rates means that someone here with a mortgage of £200,000 will be paying £1,000 a year more than in the US. What is the Minister’s explanation for that?

[John Glen]

I am here to account for what has happened in the UK. Obviously, there are differences—[Interruption.] If I may answer. There are differences across the EU and the US. What I am telling the House, which is quite transparently clear, is that inflationary pressures are affecting all economies at the moment, and it is my responsibility to account for what we are doing as a Government.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 28th June 2022 Commons Chamber

[John Glen]

I thank my hon. Friend for his question. He is an expert in this area, given his role in Barrow. We will be amending the Credit Union Act 1979 shortly, which will allow credit unions to offer more services such as hire purchase, conditional sale agreements and so on. With respect to the common bond—that being the link for all credit union members—we will need to see evidence that it supports the needs of the sector, but I have been working closely with the Association of British Credit Unions Limited, the trade body for 70% of credit unions, on its “Vision 2025” document. I visited its conference recently, and we will bring measures forward shortly in the financial services and markets Bill.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Further to the excellent question from the hon. Member for Barrow and Furness (Simon Fell), I say gently to the Minister that Ministers have always had warm words for credit unions, which I welcome, but have been somewhat slow to give them or other mutuals, such as friendly societies, the Whitehall and parliamentary support for the legal reforms to drive significant expansion. Will the Minister now back the private Member’s Bill of my hon. Friend the Member for Preston (Sir Mark Hendrick) and require all public bodies to promote credit unions going forward?

[John Glen]

Over the years, we have had considerable dialogue on many of these measures. As I said, the legislation that the sector is looking for will be introduced in the next few weeks. I am aware of the Bill of the hon. Member for Preston (Sir Mark Hendrick), and I am seeking to have a meeting with him imminently—in the next few days or next week—to discuss it and to see what we can support.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 7th December 2021 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

The Chancellor of the Exchequer will be aware of the considerable public unease about the proposed demutualisation of Liverpool Victoria. Will he therefore consider sympathetically the cross-party letter he has received from over 100 parliamentarians calling for a review of the law governing mutuals?

[John Glen]

As the hon. Gentleman knows, we have had considerable engagement on this subject. This is a matter for the Financial Conduct Authority, and we have discussed it. Obviously, members will now vote on the proposal. On the broader issue of how this sector is treated, I remain willing to engage with him on further changes and reforms that may help it in future.

Demutualisation of Liverpool Victoria

Debate between Gareth Thomas and John Glen

Wednesday 15th September 2021 Commons Chamber

[Gareth Thomas]

I have two interlinked questions, if I may. First, the Financial Conduct Authority, in its letter to the all-party group of 5 August, made it clear that it had already decided it would not review the interlinkage, or not, of the decision by LV= to convert to a company limited by guarantee and the subsequent proposal to demutualise. I recognise that the Minister cannot intervene with the regulators directly, but he can, as I understand it, because he meets with the chief executive of the FCA, seek an explanation of that decision. Secondly, if the FCA will not engage with that question sufficiently to satisfy me, could he at least ask it to publish the details of the two independent experts appointed by the board of LV= so that customer-owners can begin to make contact with them to ask them questions about what exactly the plans of LV= are?

[John Glen]

I am always ready to look at constructive suggestions and am happy to take this forward. I suspect there may be legal impediments to the publishing of some of that information, but I will certainly ask the questions and seek to relay to the hon. Gentleman the fullest answer that I am able to. I am frequently in my current role in between this place and independent regulators. It is right that our regulators are independent and I see the frustrations that exist within that, but I am happy to take forward a constructive dialogue as far as I can.

I do not think I can add much more at this point. I recognise the sincere commitment of hon. Members who have spoken to this issue, their frustration with what has happened, the apparent unnecessary nature of this transaction, given the history and the apparent change in the direction of travel with little warning, but I am clear that the regulators are very aware of their obligations to safeguard the interests of members and I look forward to the judgments coming forth in the coming weeks and months. I hope that that gives the hon. Gentleman some satisfaction on the matters he has raised this evening.

Question put and agreed to.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (Second sitting)

Debate between Gareth Thomas and John Glen

Committee stage
Tuesday 15th June 2021 Public Bill Committees

[Gareth Thomas]

[John Glen]

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Debate between Gareth Thomas and John Glen

2nd reading
Tuesday 8th June 2021 Commons Chamber

[The Economic Secretary to the Treasury (John Glen)]

It is a great honour to speak in this debate and to have worked with the pensions Minister—the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman)—to bring forward this legislation. Many Members of this House, if not all, will have constituents who have been affected by the issues that we have dealt with and discussed this afternoon.

I am pleased that the Bill has the support of Members across the House. I have listened carefully to the debate. Observations have been made about the FCA and about the House’s confidence in its conduct; I will seek to address those points and to respond to the important points raised by several hon. Members about the compensation scheme for London Capital & Finance.

Let me begin with the scope of the compensation scheme and what it means in relation to the Government’s approach to future firm failures—a point that the right hon. Member for Hayes and Harlington (John McDonnell) and others raised. The LCF is not the only mini-bond firm that has failed in recent years. The Treasury, in collaboration with the FCA, has examined every mini-bond issuer known to have failed in the past eight years. Following that detailed analysis, the Government are satisfied that the circumstances surrounding LCF are truly exceptional.

As hon. Members may already be aware, the issuance of mini-bonds is not regulated by the FCA. As my hon. Friend the pensions Minister set out, LCF was an FCA-authorised firm despite not receiving any income from regulated activities. LCF is unique in that regard; indeed, it is the only mini-bond issuer that was authorised by the FCA and that sold bonds to on-lend to other companies. That is important, because one of the central findings in Dame Elizabeth Gloster’s excellent report is that because LCF was authorised, the FCA should have considered its business holistically, including the unregulated activity of issuing mini-bonds. The FCA cannot be said to have the same responsibilities with regard to unauthorised firms. Although the Government have not seen evidence to suggest that the regulatory failings at the FCA caused the losses for bondholders, they were a major factor that the Government considered when deciding to establish the scheme.

I pause to acknowledge the representations made by the hon. Members for Strangford (Jim Shannon) and for Kirkcaldy and Cowdenbeath (Neale Hanvey) and by my hon. Friend the Member for Leigh (James Grundy). I will set out in due course, in the coming months, the details of how the scheme will operate. I am very happy to take correspondence on individual cases, but I think it would be inappropriate to try to address at the Dispatch Box this evening every single case raised. However, I have received and read many letters from individuals who have lost money after investing in LCF and other failed mini-bond firms, including Blackmore Bond and Basset & Gold, which were raised in the debate.

I sincerely extend my sympathy to all those affected, as I know that many individuals have suffered financial hardship—severe financial hardship, in many cases—as a result of their investment losses. However, I must be clear that the Government cannot step in to pay compensation in respect of every failed financial services firm. That falls outside the financial services compensation scheme, would create a moral hazard for investors and would potentially lead individuals to choose unsuitable investments, thinking that the Government would provide compensation in all cases if things went wrong.

The Government’s approach follows the historical precedent. I note that only three compensation schemes have been established in the past 35 years—for Barlow Clowes, a Ponzi scheme that failed in the late 1980s, Equitable Life and LCF—despite many investment firms failing over that period. The Government are also seeking to ensure that the situation never arises in the future. In April, we launched a consultation with proposals to bring mini-bonds into FCA regulation.

The right hon. Member for Wolverhampton South East (Mr McFadden) asked a number of questions about the Government’s confidence about the FCA’s capability. As the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham mentioned, the transformation programme that the new chief executive, who has been in post for just over eight months, is undertaking at pace is designed to empower the organisation at all levels to hear the representations that the right hon. Member for Wolverhampton South East made, to act on them, and to deal proactively with the cases that are raised.

[Gareth Thomas]

It is encouraging to hear the Minister’s confidence in the transformation programme. Given the concerns that consumers might lose out in the demutualisation of Liverpool Victoria, will he sit down with the new chief executive of the FCA and go through how the FCA will ensure that consumers’ interests are properly protected if that demutualisation goes ahead?

[John Glen]

I thank the hon. Gentleman, as ever, for his representations. He has been a determined campaigner for that sector during my tenure. I have regular conversations, at least every six weeks, with the chief executive of the FCA, and we discuss a whole range of matters. I would be very happy to discuss that matter with him when I next speak to him in the next few weeks.

As Members from across the House have recognised today, the measure concerning a loan to the board of the Pension Protection Fund, set out in clause 2, is vital to ensure that those defrauded of their pensions by scam pension liberation schemes are able to access the compensation that they deserve. The Bill will ensure that those whose pensions have been unjustly targeted by fraudsters receive their pensions. We must continue to provide a safety net for people across the UK, who deserve to have confidence that they will have a pension pot for their retirement. I note that a number of observations were made about the ongoing challenge of dealing with the evolving nature of financial services firms and the sophistication of scams. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham, and I are working across Whitehall to bring an effective resolution to this matter.

I acknowledge that Members from across the House have supported the principles of the Bill, and I welcome the support that it has received. It will offer some relief to the enormous distress and hardship suffered by LCF bondholders and victims of fraudulent pension liberation schemes. It is an important Bill, and I want to move as quickly as possible from Royal Assent to enact it and deliver that compensation. I hope that right hon. and hon. Members will support it this evening.

Question put and agreed to.

Bill accordingly read a Second time.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill:

Committal

The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 17 June.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Alan Mak.)

Question agreed to.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(a) expenditure incurred by the Treasury for, or in connection with, the payment of compensation to customers of London Capital & Finance plc; and

(b) loans by the Secretary of State to the Board of the Pension Protection Fund.—(Alan Mak.)

Question agreed to.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (ways and means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, it is expedient to authorise such levying of charges under section 189 of the Pensions Act 2004 and Article 171 of the Pensions (Northern Ireland) Order 2005 as may arise by virtue of that Act.—(Alan Mak.)

Question agreed to.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 2nd July 2019 Commons Chamber

[John Glen]

I acknowledge the difficult situation that my hon. Friend has in Bungay. The Government-established Payment Systems Regulator is closely monitoring developments in ATM provision and, as I said, there are mechanisms in place to intervene. I am very happy to meet him to discuss the application of those to the situation in Bungay.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Given that post offices and credit unions provide easy access to cash, is it not now time to offer business rates relief to both to enhance the provision of cash and other affordable financial services?

[John Glen]

Of course small businesses receive that relief. The Chancellor will have heard that representation for the next fiscal event, but it is not a matter that I can comment on specifically at this point.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 9th April 2019 Commons Chamber

[John Glen]

I am grateful to my hon. Friend for that question and for his work as chair of the all-party parliamentary group on financial technology over the last four years. The regulator is the UK’s leading authority for interchange fee regulation, as he knows, and it is conducting a review into the fees that businesses face when accepting card payments. I acknowledge his concern, and we are open to hearing views on this issue, and on digital payments more broadly, as part of our call for evidence.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Can the Minister think of one independent trade expert who thinks FinTech in the UK will do better once Britain has left the European Union?

[John Glen]

As the hon. Gentleman knows, it is the Government’s policy to have an orderly exit from the EU. However, we know that FinTech has proved to be very resilient in all circumstances. We had record investment of £15 billion last year. That is testimony to the creative power of that industry, working in the financial services sector in the City.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 5th March 2019 Commons Chamber

[John Glen]

I can confirm that the national living wage will rise again this year, to £8.21. I can also tell my hon. Friend that later this year the Low Pay Commission will be set a new remit for beyond 2020. We want to be ambitious, with the ultimate objective of ending low pay in the UK while protecting employment for lower-paid workers.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

I suspect the Minister knows that it will be more difficult to increase jobs in services businesses if we replace single market membership with a free trade agreement. Will he set out for the House what estimate he has made of the scale of the difficulty, particularly that facing financial services businesses that want to increase jobs in the current Brexit situation?

[John Glen]

Financial services are well protected and ready to engage on arrangements for beyond the implementation period, but the Government are not complacent in respect of the whole economy. We have made a series of interventions through our productivity fund to meet the challenges of the next generation.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 6th November 2018 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

T4. The co-operative movement in the UK has a turnover of £36 billion. Given that it employs thousands, and that thousands will benefit as a result of the economic and social benefits that co-operatives bring, why was there no mention of the co-op movement in the Budget?

[The Economic Secretary to the Treasury (John Glen)]

As the hon. Gentleman knows, the co-operative movement is very important to our economy; we have met to discuss various aspects of its future. I am happy to meet him again to discuss the matters that he wishes to bring forward.

Oral Answers to Questions

Debate between Gareth Thomas and John Glen

Tuesday 3rd July 2018 Commons Chamber

[Gareth Thomas (Harrow West) (Lab/Co-op)]

T6. In its report published today, which was commissioned by the Co-op party, the New Economics Foundation identifies lack of access to finance as a significant inhibitor in the growth of the co-op sector. While I am grateful to the Economic Secretary to the Treasury for his interest in this area, I wonder what steps the Treasury might now take to tackle that problem.

[The Economic Secretary to the Treasury (John Glen)]

I held a workshop with representatives of various credit unions this week, and one with community development financial institutions last week. I have convened a working group from the financial inclusion taskforce, which will meet in September to consider urgently expanding access to credit options on better terms than the high-cost ones that exist in the market. We are doing all that we can to incentivise growth in that sector.

Financial Guidance and Claims Bill [ Lords ] (Third sitting)

Debate between Gareth Thomas and John Glen

Tuesday 6th February 2018 Public Bill Committees

[John Glen]

It is a pleasure to serve under your chairmanship once again, Mr Rosindell.

Government amendments 3 and 4 are small consequential amendments to bring relevant provisions into line with the changes made by clause 24 to section 21 of the Financial Services and Markets Act 2000. Clause 24 amends FSMA to enable the Financial Conduct Authority to regulate specified activities in relation to claims management services in Great Britain. That includes extending section 21 of FSMA so that the financial promotions regime, which deals with advertising and marketing by regulated firms, applies to claims management activity. Government amendments 3 and 4 will ensure that the financial promotions regime can function effectively. I am sure that Members will agree that it is necessary to make those amendments to ensure that claims management activity is captured.

New clause 7, which was tabled by the hon. Members for Birmingham, Erdington, for Weaver Vale and for Lewisham, Deptford, seeks to ensure that the FCA adheres to a set of regulatory principles in relation to acting in the best interests of consumers and managing conflicts of interest fairly. Aside from the provisions in general consumer law, the FCA already applies rules to firms that conduct regulated activities in relation to their dealings with consumers.

First, regulated firms must adhere to the “principles for businesses”, which are fundamental obligations set out in the FCA handbook. Principle 2 requires firms to conduct their business

“with due skill, care and diligence.”

Principle 6 requires a firm to

“pay due regard to the interests of its customers and treat them fairly.”

Principle 8 sets out that a firm

“must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.”

Secondly, the FCA’s “client’s best interest” rule states that a firm

“must act honestly, fairly and professionally in accordance with the best interests of its client”.

That rule applies to a number of regulated activities. Thirdly, many FCA rules also contain an obligation on firms to take reasonable care for certain regulated activities. Finally, the rules in the FCA handbook are supplemented by more sector-specific rules in various FCA sourcebooks.

Under its existing objectives, when the FCA takes responsibility for the regulation of claims management companies, it will be able to apply its existing principles for businesses and to make any other sector-specific rules that may be necessary. To secure appropriate consumer protection, the FCA supervises against those rules and other provisions, and can take enforcement action against firms where necessary.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Does the Minister accept that there is a risk that the FCA has been captured by some of the bigger financial interests, and that additional legal protection is therefore required to rebalance how it operates to properly protect the consumer interest?

[John Glen]

I acknowledge that such concern has been widely expressed throughout the passage of the Bill. However, the FCA has issued total fines of more than £229 million. In its view, its regulatory toolkit is currently sufficient to enable it to fulfil its consumer protection objective. The FCA will consider the precise rules that apply to claims management companies and how they form an effective regulatory regime overall. In doing so, the FCA will need to take into account its statutory objective of securing an appropriate degree of protection for consumers. It will also consult openly and publicly on the proposed rules.

The final regime is not set without consultation or reference to the legitimate concerns raised during the passage of the Bill. I note the hon. Gentleman’s observations, but they can be accommodated by the way in which the FCA will handle the matter. Given that, the Government do not believe the new clause is necessary. According to the explanatory statement, the new clause would introduce a duty of care on claims management companies. I will provide some more detail on that duty of care because I have thought a lot about it and have new points that I want to raise following Second Reading. The Government recognise that there are different views on the merits of introducing a duty of care for financial services providers and what it would mean in practice.

Macmillan Cancer Support has run an excellent campaign drawing attention to that important issue. Last week I met Lynda Thomas and her team from Macmillan in the Treasury to discuss their work and their concerns around the proposed duty of care. They told me of their work with Nationwide and Lloyds. They have been working in partnership with the sector on the role of firms in supporting customers.

[John Glen]

I acknowledge the case, but it is not for me as a Treasury Minister to comment on it. We need to be clear about the impact of the duty of care and examine it carefully. It is right that we challenge practices that are not up to standard. The question is how we most effectively achieve that without wider collateral damage.

On Macmillan’s partnership work in the financial services sector in supporting customers affected by cancer, I pay tribute to the work done and I am grateful for the insights that it brings, but there is huge uncertainty around the potential impact a duty of care could have on both firms and consumers. As with all significant policy changes, it is important to understand all potential pros and cons. I hope Members agree that there would need to be a thorough assessment of the potential impact of a duty of care before any decision is made on a change of policy. For example, a duty of care might enable consumers to bring financial services firms to court. There might be significant cost, complexity and time involved with that, leave alone codifying exactly what the duty of care would mean.

In turn, a duty of care might lead to a negative impact on product provision and approach to innovation, as firms might not want to risk legal challenge based on an untested new concept. Increasing operational costs for firms as a result of a duty of care will inevitably lead to higher prices for consumers, including those in the most vulnerable category. Given those considerations, I hope Members agree that it would not be appropriate for the Government to amend the Bill before a full assessment of the potential impact has been conducted.

The Government believe that the FCA, as the UK’s independent conduct regulator for financial services, is best placed to evaluate the merits of a duty of a care. Recognising the pitch and depth of the legitimate concerns raised, last week I met Andrew Bailey and discussed the duty of care with him, and the FCA will discuss it further. Concern has been expressed that, in the determination to issue a discussion paper post-Brexit, there was too much of a delay. I pressed Andrew Bailey on the need to bring that forward. He understands and acknowledges the desire of Parliament for progress on evaluation, so the FCA now proposes to issue a discussion paper later this year. It will invite contributions from all interested parties on the case for and against a duty of care, what form such a provision might take and consequential issues arising from adopting it. That will be an open process, designed to gather views. I am grateful to the FCA for its commitment to accelerate its proposed timetable.

[Gareth Thomas]

I commend the Minister for pressing Andrew Bailey, because the FCA under his leadership has a reputation of having become a bit pedestrian. However, I do not see why there is a clash between adding the new clause, as my hon. Friend the Member for Birmingham, Erdington proposes, and cracking on with the consultation exercise that the Minister just described. Surely they gel nicely.

[John Glen]

My view, and the Government’s view, is that the pace of that consultation process needs to be stepped up and the FCA needs to respond, with all consequences in mind for vulnerable people with respect to the costs of services and the protections legitimately achieved through the FCA’s activity.

I stress that the FCA has a close focus on vulnerability in its broader work. I note the concerns of the hon. Member for Harrow West, but it works in the interests of all consumers of financial services. In October, the FCA published its “Financial Lives” survey, the first annual large-scale survey of 13,000 interviews, designed to add a substantial new source of data to the regulator’s understanding of consumers in retail financial markets. Subsequently, it published the “Approach to Consumers” paper, which details how it will measure the effects of its actions on consumers, particularly with respect to access and vulnerability. I and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham, take this matter seriously. We will challenge the FCA on the further steps that need to be undertaken.

[Gareth Thomas]

May I push the Minister a little harder? I could understand it if he was arguing that there should be a change to the proposal made by my hon. Friend the Member for Birmingham, Erdington, saying that regulations should be brought forward to give Government the chance to bring in a duty of care once the consultation had taken place. Instead, he seems to be saying, “Let’s not bother putting anything in the Bill that gives us the power to bring that in later. Let’s just wait and see—mañana!—when the FCA can be bothered to get round to the consultation exercise. Then we might look at bringing forward primary legislation.” My worry is that an opportunity for primary legislation will not come around again. I therefore press him to see whether he could be a little more sympathetic to the case my hon. Friend will advance.

[John Glen]

I am grateful to the hon. Gentleman for his remarks. I would not characterise the Government’s position as, “Let it happen mañana and take our hands off the tiller.” I met Andrew Bailey, and this was not his starting point. It is for Ministers to talk to the FCA, take the views of Parliament as clearly expressed by Members on both sides of the House, and use that pressure to force the FCA to address the issue in a comprehensive way that deals with the real experience of our constituents.

The Government have set out that process, and I have set out the rules and facilities that exist for the FCA. I am convinced there is a process in place that will enhance the necessary protection.

--- Later in debate ---

[John Glen]

I am grateful to the hon. Gentleman for his comments. There is broad agreement on how serious the issue is, but I would characterise the Government’s approach as wanting not to send a message but to secure an outcome. They want to secure an outcome when they understand exactly what the impact of the changes might be.

As I said in some of my earlier remarks, there is huge uncertainty about how a potential duty of care would impact on firms and consumers. That is why I am very pleased with the accelerated timetable. I acknowledge that there is no absolute clarity about what will flow from that, but that is because we do not know what the outcome of the discussion will be. However, I take on board the hon. Gentleman’s concerns and I acknowledge his sensitivity to what Macmillan has said—it is unacceptable that 11% of people who have cancer tell their financial service provider—but it is also true, as my hon. Friend the Member for Bexhill and Battle said, that not all banks are doing a poor job. I heard from Macmillan about the wonderful work that Nationwide has done, and I think it is for other banks to reflect on what they need to do to change their behaviours.

[Gareth Thomas]

Nationwide is not a bank; it is a building society, with a very different tradition to the corporate interests of the big banks. I make that as an aside. Although I am not normally a fan of secondary legislation as opposed to primary legislation, I wanted to press the Minister: will he consider the broader point made by my hon. Friend the Member for Birmingham, Erdington—that there might be a case, surely, for the Minister to consider bringing forward on Report the scope for secondary legislation to bring in such a duty of care once the FCA, when it can be bothered, finally produces its consultation document?

[John Glen]

I am grateful for the hon. Gentleman’s comments, but I do not share his characterisation of the FCA’s willingness to engage on this. As I set out, the FCA is engaged in dialogue with Macmillan and has now accelerated the timetable for dealing with the subject. I will reflect on the comments made and see what can be said to give more assurance further on, but I am convinced that the dialogue with the FCA will lead to a proportionate outcome that takes full account of the impact. I therefore reiterate my hope that the new clause will be withdrawn.

--- Later in debate ---

[John Glen]

Government new clause 6 is about cold calling made for the purposes of providing claims management services. As Members will be aware, that topic has been discussed at length during the passage of the Bill. The Government have listened to the debates closely and committed in the other place to table an amendment that would restrict cold calls made by claims management companies. The new clause makes good on that commitment.

Calls from claims management companies and other entities are not merely a source of irritation, but can result in extreme distress to those answering the calls, especially the most vulnerable in our society. As the Government have stated in previous debates, we have forced companies to display their calling line identification when they call. We have made it easier to prosecute those involved in making the calls by removing the threshold for financial penalties to be administered and we have strengthened the Information Commissioner’s powers for imposing fines on wrongdoers.

In addition, the claims management regulator and the Solicitors Regulation Authority have taken action against claims companies and solicitors that have breached tough direct marketing rules, including in relation to accepting illegally generated leads. However, we appreciate that we need to do more to truly eradicate the problem. New clause 6 seeks to ban cold calls made for the purposes of direct marketing in relation to claims management services, except where the person called has given prior consent to receiving such calls. The new clause will insert a provision into the Privacy and Electronic Communications (EC Directive) Regulations 2003, which govern unsolicited direct marketing.

The new clause will ensure that any call, whether it is from a claims management company, an individual or a lead generator, made for the purposes of direct marketing in relation to claims management services, is an unlawful call unless the receiver has explicitly consented to that call being made to them. The new clause takes the onus away from the individual to opt out of such calls being made to them—by signing up to the telephone preference service, for example—and puts the responsibility back on the organisation and its due diligence before making such calls.

There are complexities in legislating, including those related to navigating EU frameworks. However, the Government are convinced that the new clause will have the effect of making unwanted calls from claims management services unlawful.

[Gareth Thomas]

Is there not a concern that, having given consent to be phoned once, an individual might then be subject to a series of unwanted phone calls? One could imagine a situation in which an initial call is wanted by one of our constituents, but a company takes advantage of the permission to make a series of unwarranted further calls by arguing that it has the legal power to do so. What would happen in that situation?

[John Glen]

I will need to write to the hon. Gentleman on the mechanics of what can be done subsequently and how quickly and am happy to do so as quickly as possible.

[Gareth Thomas]

I apologise for intervening again, but I am thinking of an elderly constituent. One hears of scams and constituents being taken advantage of. How do we protect the individual who genuinely wants information and perhaps gives permission once, but then, perhaps because of their age or infirmity or whatever, they start to get taken advantage of? How do we prevent that?

[John Glen]

I am sorry that I cannot give the hon. Gentleman a full service response, but I will look into that issue carefully and keep in mind the specific circumstances he has described, which I will seek to address in my reply.

The new clause is another robust proposal to add to our package of measures to tackle unsolicited marketing calls. I hope they will be gratefully received by consumers across the UK.