Debt Management Plans
Debate between Gordon Banks and Ed DaveyWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I congratulate the hon. Member for Scunthorpe (Nic Dakin) on securing this debate. I was pleased that he did, and it is good that so many hon. Members have contributed to it and aired their concerns. The Government are acutely aware of those concerns, and we share many of them. It is a sign of our desire to protect vulnerable individuals that debt management issues were a major part of the questions that we asked as part of the joint Treasury and Department for Business, Innovation and Skills call for evidence. The “Consumer Credit and Personal Insolvency Review” was published last year, and covers all aspects of the consumer credit life cycle, including what happens when things go wrong.
Hon. Members will appreciate that it is difficult to obtain a precise picture of the debt management industry, even to the extent of obtaining accurate figures for the number of plans in place. Some of the concerns that we have heard recognise that lack of information. I cannot give details today, but I am keen to improve the quality of information about the industry. I will say more about that when we publish our response to the call for evidence, which will be soon.
Despite the constraints, improvements have recently been made to protect the most vulnerable debtors. By extending the eligibility criteria for debt relief orders, we have enabled more of the most vulnerable people to find a way out of unsustainable debt. Some safeguards are already in place, although I understand that several of my colleagues would like us to go further, and I will go on to talk about that. Providers of debt management plans are required to hold a consumer credit licence, and holders of those licences are monitored by the Office of Fair Trading. The OFT has strong enforcement powers. Following its compliance review last year, it issued warnings against 129 companies, of which 43 have since left the market and investigatory work is ongoing in many other cases. The OFT is determined to see that work through as soon as possible.
The OFT has recognised the need to improve its guidance, and it recently published proposed revised guidance for debt management plans. That guidance sets out the standards that the OFT will expect of debt management businesses, and makes it clear that, among other things, such businesses must be fully transparent about the service on offer and the fees charged; explain to consumers the risks and benefits of each proposed solution; not use misleading names or advertising, including misleading web-based adverts; and ensure that the advice provided is in the best interests of customers. Any business that fails to adhere to that guidance can expect strong action to be taken against it, including, where appropriate, the removal of its licence. The industry has recognised the need to improve its practices, and it is welcome that a number of debt management organisations have joined the Debt Managers Standards Association, which, as the OFT has recognised, is trying to improve standards.
What more needs to be done? The Government believe strongly that those struggling with debt must be assured that they will receive the best advice and be directed to the solution most suitable for their needs.
Mr Davey
I am concerned about the time; perhaps I can make a little more progress and then give way to the hon. Gentleman.
Free and impartial advice is available for people in difficulty. We need to make sure that such advice is well publicised and that vulnerable people know where to find it and can avoid unscrupulous businesses that may seek to take advantage of them. We know about Citizens Advice, and I was pleased that the hon. Member for Scunthorpe mentioned the Consumer Credit Counselling Service, which is a fantastic organisation. He also, quite rightly, mentioned Payplan. We must ensure that people are aware that they can get quality advice for free. That is essential.
Hon. Members have expressed concern that the aim of some fee-charging debt management companies is to make money for themselves, rather than to ensure that an individual finds the appropriate solution for their circumstances. We have also heard, both today and on previous occasions, that some individuals who enter a debt management plan find that they emerge from that plan in a worse position. Clearly, that cannot be right.
I am concerned that those who are in a vulnerable position might seize on an advert that offers what appears to be an easy way out of their difficulties. If they are told that the organisation that they approach will deal with all their debt problems, they may not ask about the likely costs and that will create difficulties. The answer to that complex problem does not necessarily lie in more regulation. We need to empower debtors to find the right information, access the right sources of impartial advice, and find the solution that best meets their needs. We confirmed some time ago that we will fund the face-to-face debt advice project for a further year, while work is done to move the provision of such advice to a more sustainable footing. As my hon. Friend the Financial Secretary to the Treasury said yesterday in the House,
“it is the intention that the Money Advice Service—which is funded by the financial services industry—will take on that work.”—[Official Report, 4 July 2011; Vol. 530, c. 1254.]
It is important that free debt advice is available through Citizens Advice, the Consumer Credit Counselling Service and other quality, free debt advice services.
I want to look at what more can be done to ensure public awareness of reputable debt advice sources, whether online, over the telephone or face to face. Everyone involved in the debate—creditors, debt advice agencies and providers—should be involved in finding the best way forward. When we publish our response to the call for evidence, we will make proposals designed to foster that collaborative approach and help people with unsustainable debts to get the help and advice they need to take control of their lives once more.
Gordon Banks
The Minister talks about ensuring that creditors get the best advice. Many of the major lenders fund debt management processes through Payplan, for example. Is there any mileage in making the main funders of an organisation such as Payplan, which could be the major creditor of someone entering a debt management plan, have a role in guiding someone from a fee-paying to a non-fee-paying organisation?
Mr Davey
The hon. Gentleman makes an interesting point. It is surprising that many public bodies—whether local authorities, utilities or lenders—do not make those who cannot pay their bills or are in debt as aware as possible of quality, free advice services. We need to talk to those organisations because raising awareness is critical.
Postal Services Bill
Debate between Gordon Banks and Ed Davey(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
I want to make some progress, as I have a lot of amendments to deal with.
I was grateful to my hon. Friend the Member for Argyll and Bute (Mr Reid) for his welcome for most of the aspects of regulation in the Bill and for how we have sought to ensure that remote rural areas, particularly in Scotland, have the protections they need. However, I gently say to him that there is the requirement for letters to be delivered six days a week. If a parcel is ready to be delivered on a Saturday, Royal Mail will deliver it because a postman or postwoman would be going to that address anyway to deliver letters. I ask him to think about the practicalities of that. Where they are delivering in remote places to remote addresses, they deliver letters in vans. Where they are delivering in towns, increasingly in future, because of the roll-out of this programme, posties will use delivery trolleys. Those are being introduced as a deliberate reform in the way that letters and parcels are delivered. They are being brought in partly to ensure that posties can deliver parcels as well as letters. Given that there is already the minimum service requirement of six days a week for letters, I think my hon. Friend will be reassured on this point.
Amendment 14 to clause 32 is unworkable. It would add disproportionately to the burdens on the universal service provider and it would put at risk the health and safety of hard-working postmen and women. I am surprised the hon. Member for Angus wishes to do that. The exception in clause 32 has been in place for many years. It is in the European postal service directive. Removing it would put at risk the health and safety of Royal Mail men and women. I think he should think very seriously about that.
On amendments 23 to 26 to clause 33, the Bill is about protecting the universal service. Clause 30 enshrines the same minimum requirements in this Bill as are in the current legislation. The power in clause 33 to review the minimum requirements enhances the safeguards against changes to those minimum requirements. As the hon. Member for Ochil and South Perthshire (Gordon Banks) had to admit, at the moment—his Government failed to acknowledge this—there are powers for the Government in this regard. We could, by negative procedure, move the current minimum service requirements down to the level of those in the European postal service directive. I think that is unacceptable, however, which is why we have added extra safeguards to the Bill. They include the requirement that should Ofcom make a judgment that it is in the consumer’s interests for there to be changes, and should the Secretary of State accept that, there would have to be votes in both Houses of Parliament. That is a very strong protection, and he ought to welcome it. Is he going to welcome it?
Gordon Banks
No, but what I am going to do is ask the Minister whether he agrees with the Secretary of State that he has no intention of reducing the level of service. If that is the case, the Minister should support our amendments, not talk about what he has put in the Bill.
Mr Davey
The problem with the hon. Gentleman’s amendments is that they are very confused. For example, in proposing a review after five years in respect of Ofcom, rather than 18 months, he does not seem to understand how the universal service regulations work. We have the minimum service requirements in clause 30, but there is also clause 29, and the reason why there is an 18-month review is to allow the universal postal service order to be brought in so that the sorts of requirements and the level of universal service that exist at present can be introduced quickly. I would have thought that the hon. Gentleman would welcome that. The fact that he does not shows that, despite all our work together, he still does not understand the Bill.
Amendments 29 and 30 are very important, but I am not going to be able to give them the time that they deserve. I simply say to the hon. Member for North Ayrshire and Arran (Katy Clark) that if we were to accept them, they would remove important safeguards for competitors and consumers, and that would not be welcomed by people at large. It would undermine competition and the incentives for efficiency. Our Bill, unlike the one in 2009, seeks to change the regulatory system—
Gangmasters Licensing (Extension to Construction Industry) Bill
Debate between Gordon Banks and Ed Davey(13 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
My hon. Friend is exactly right in his analysis of the construction industry and of how we use licensing as one of the tools to deal with everything from health and safety to fairness in the workplace. We need to consider the conditions that need to be met before something such as licensing is appropriate. We need to consider whether existing enforcement arrangements are inadequate; whether there is hard evidence of illegal activity; where a licensing system would be a proportionate and effective way of tackling the problems that are seen; and where licensing would be practicable, enforceable and, finally, affordable. The Government do not consider that those tests have been met for the construction sector.
There is a misapprehension in some quarters that employment agencies that supply labour to the construction sector are unregulated, and that workers are unprotected. In fact, regulatory safeguards are already in place for all agency workers, whichever sector they work in. For example, employment agencies operating outside the Gangmasters Licensing Authority’s sectors have to comply with health and safety and working time legislation enforced by the Health and Safety Executive. They must also comply with the national minimum wage regulations enforced by Her Majesty’s Revenue and Customs. In addition, they must adhere to special employment agency regulations enforced by my Department’s employment agency standards inspectorate—the EAS—which responds to complaints from agency workers, and carries out an additional programme of proactive, risk-assessed inspections each year.
On health and safety legislation and the work of the HSE in the construction sector, the hon. Member for Midlothian is rightly worried about health and safety, which is a big concern for the sector, but I am not convinced that a licensing system would improve the sector’s health and safety record. The GLA applies a range of licensing standards. The conditions for health and safety are intended to ensure agreement between the labour supplier and the hirer about who will have responsibility for managing day-to-day health and safety, including the preparation of risk assessments, but that is already clear in construction.
Under the Construction (Design and Management) Regulations 2007, the principal contractor has responsibilities for ensuring the health and safety of all individuals who work on a construction site regardless of their employment status. This includes directly employed workers, labour-only sub-contractors and the self-employed. In addition, each contractor working under the principal contractor has duties to every individual working under their control. Those duties are on top of the requirements that individual employers have to their employees. Duties of the principal contractor include the requirement to consult all workers involved in a project to ensure that the measures taken to protect their health and safety are effective.
Gordon Banks (Ochil and South Perthshire) (Lab)
I am listening to the Minister’s remarks with great interest. He has explained his position on why the GLA is not relevant to the construction industry, but will he expand on why he has changed his mind since signing early-day motion 1366 in 2009?
Mr Davey
I have considered all the issues that would have to be taken into account, such as whether it would be appropriate, proportionate and justifiable, and it is clear that the EAS does an extremely good job and that it deals with all the problems. Let me quote some of the statistics, which are worth bearing in mind. In 2009-10, there were 42 fatal injuries to workers in construction, with a fatal injury incidence rate of 2.2 per 100,000 workers per year. That compares with 105 deaths and a rate of 5.9 per 100,000 per year in 2000-01. Injury rates are also at an all-time low since the reporting regulations changed in 1995. That is done under the existing system. There has been some success and the previous Government should take credit for that.
It is clear that an extension of gangmaster licensing is not the way forward, but there is a case for taking a fresh look at our compliance and enforcement arrangements. As the hon. Member for Midlothian said, existing enforcement functions are undertaken by a number of bodies, including the EAS, HMRC, the GLA and the HSE. The Department for Environment, Food and Rural Affairs also has a role, in enforcing the agricultural minimum wage, but that will disappear with the proposed abolition of the Agricultural Wages Board as part of the public bodies review.
The single pay and work rights line has drawn those bodies closer together and has been a major step forward in creating a single port of call for workers who want advice or to report an abuse. It has also been a powerful spur to more joint working between the enforcement bodies, which are now carrying forward multi-issue cases together on a regular basis. However, the time is right to ask whether it is possible to build on the progress that has been made. I am therefore announcing today an intention to review the Government’s workplace rights compliance and enforcement arrangements to establish the scope for streamlining them and making them more effective. I hope that the hon. Gentleman will welcome that announcement. The review will be undertaken next year, when other priorities permit, and will be part of the wider rolling review of employment law being co-ordinated by my Department.