Bank of England and Financial Services Bill [Lords]

Debate between Helen Goodman and Gary Streeter

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Helen Goodman]

I am pleased to follow the hon. Member for Broxbourne (Mr Walker) who made an excellent speech on an important subject. He showed his characteristic bravery and forcefulness in addressing an issue that many other hon. Members wanted to address, but were unenthusiastic about putting themselves in the firing line.

The Minister said earlier that everybody is happy with this Bill, but now that we are discussing the regulation of financial services, she may discover that Labour Members are not quite so happy with this part of the Bill. I wish to speak in support of amendments 8 and 9, and I am also sympathetic to amendment 2 tabled by the Scottish National party. Getting the senior management regime right is vital for reducing the risk of further irresponsible behaviour in financial institutions, particularly the banks. We all know the devastating impact that the behaviour of the banks had on rest of the economy—anyone who is in any doubt about that should see the film “The Big Short”, which wonderfully describes that episode, albeit from an American point of view.

The clauses on the senior management regime are a retreat from the sensible legislation introduced in 2012, following the Parliamentary Commission on Banking Standards, which recognised that one way of changing behaviour and culture is to make those people at the top of the banks accept their full responsibility. The clauses in the Bill no longer do that. It is completely sensible for people to be expected to have the same responsibility for the behaviour of those who work for them that other institutions have for health and safety.

We have heard a number of arguments for the Government’s decision to reverse the reversal of the burden of the proof—rather an awkward mouthful—and one of the main arguments is that the regulatory approach that was legislated for in 2012 is too burdensome. This, however, misses the whole point, which is that we want people to spend more time looking at how to reduce risk rather than spending a great deal of time on how to make lots and lots of money irrespective of the risks posed to the economy. The risk does not apply ultimately to themselves on their own account, but it infects all other financial institutions.

I attended a seminar in the City last week, and senior practitioners from law firms, accountancy firms and from some of the big asset managers were in attendance and proved to be supportive of the original parliamentary commission approach. I expressed my feeling that it was disappointing that the Chancellor was going back on this, and suggested that he was not doing it as a whim, but because he had been lobbied to do so. I asked why they thought he had been lobbied in this way. It was, of course, a naive question, and I had no idea what the answer would be. They all roared with laughter and said, “Well, it’s obvious. It’s a way to facilitate people making millions of pounds without facing any downside risks.”

We cannot put ourselves in that situation again. The cost of the bail-out in 2008 was £133 billion. We really must take seriously the lessons that can be learned from that, which is why the amendments tabled by my Front-Bench team and by the SNP should be taken seriously and accepted by the Government.

[Mr Gary Streeter (South West Devon) (Con)]

I should like to take this opportunity to introduce my new clause 10, which is aimed at safeguarding the free debt management sector. Let me reassure the Minister that this is very much a probing amendment; I know she is looking forward to responding to it.

There has been a long debate over the “fee versus free” principle in the provision of debt management plans for indebted consumers. It is not my intention to re-open that debate now, although my concern is about free providers that are facing a looming capacity crisis.

Organisations such as PayPlan and Christians Against Poverty operate the “fair share” model of free debt management that sees creditors covering the cost of customer plans on a polluter-pays basis—in other words, through schemes that are free to the debtor. These organisations are facing increasing pressure as a consequence of fee-charging firms leaving the marketplace after failing Financial Conduct Authority authorisation. In one recent case, this left 16,000 debt management clients unsupported, and these customers are now being are being signposted to free providers. The last thing people want to happen when they are caught up in the desperation of heavy debts and are trying to slog their way out of it is, of course, that the person advising them suddenly disappears so that they have to start again with new people.

The debt management sector is nearing a desperate point, and the market is becoming increasingly inefficient, with consumers treated badly in many cases. The fair-share operators I mentioned have seen their revenue reduce as a consequence of consumers’ disposable income falling. As more and more fee chargers leave the market, we will soon face a situation in which fair-share operators are unable to provide economically viable plans. Plainly, we now face a situation in which consumers will be charged higher fees and their options for free debt management services will be severely limited—again, we are going in the wrong direction.

There were considerable and commendable efforts over the course of the last Parliament aimed at safeguarding free debt management provision, most notably on the creation of a voluntary protocol. Members of all parties have tried to make similar long-term changes, reflecting the cross-party nature of this issue. More recent efforts have come from the parliamentary debt management working group, of which I am a member. I see in her place our chairman, the hon. Member for Makerfield (Yvonne Fovargue), who is poised to speak in, I hope, support of my new clause.

Recent efforts have been aimed at establishing an industry-wide offering of free consumer debt management services. I accept that, while desirable, such an approach may not be feasible at this time. The new clause provides for a small tweak to the Financial Services and Markets Act 2000, mandating all creditors, via an FCA rule change, to fund free-to-consumer debt management plans under the “fair share” model. Many large creditors—banks and credit card companies—do accept a reduction in the amount due in exchange for the establishment of a coherent plan, but some still do not, and the new clause is intended to tackle that. While it falls short of outlawing the provision of fee-charging plans, it provides a strong safeguard for the “fair share” model, ensuring that customers can continue to access free debt management plans.

I am certain that this is a robust mechanism for desperately needed reform in the debt management sector, and I hope that, subject to Members’ approval, it can be implemented without delay. I thank the Economic Secretary for her interest in the matter, and for her helpful guidance behind the scenes.

Every age has its challenges, and it may well be that historians will look back at our era and marvel at the levels of unsustainable personal debt that were carried by so many people. Such debt may arise from grave misfortune, poor choices or the actions of others, but whatever the reason, it is vital that the right help is at hand to help people to step their way out of debt, and the FCA can assist that process by making the rule changes I have proposed. I thank the Economic Secretary again for her patience and kindness, and commend the new clause to her and to the House.

Electoral Registration

Debate between Helen Goodman and Gary Streeter

Wednesday 4th February 2015 Commons Chamber

[Mr Streeter]

As I said, Mr Deputy Speaker, it is not a pleasant thought from my point of view.

The truth is that a vast amount of work is being done around the United Kingdom to get people to register before the general election, but it is important to remember that anyone who is already on the household register and is residing at that address has not been removed as a result of the shift to IER. The Electoral Commission is running a national campaign across the UK to encourage people to register to vote ahead of the 20 April deadline. It will reach all adults, with a focus on groups—already mentioned in this debate—that research has identified are less likely to be registered to vote, such as people who have recently moved home, those who rent their home, young people, and people from black and minority ethnic communities.

Some of this work is being undertaken with the support of organisations and private companies that represent these communities or have a special reach into them. For example—this is very good news—the Electoral Commission and Facebook have today announced that on national voter registration day, which is tomorrow, every person on Facebook in the UK who is eligible to vote will see a voter registration reminder message in their newsfeed. Some 35 million people use Facebook in the UK every month, which is more than the number who voted at the last general election. This is using innovative methods to reach people and encourage them to vote. We must keep returning to the point that people can now register to vote online. It takes 30 seconds, and the only thing they need is their name—[Interruption.] Yes, I have seen it done. [Interruption.] I was already registered; I was data-matched. People need their name, address, date of birth—most of us know those things—and national insurance number; ring your mum and find out what it is. If people have those four things, they can register; it takes 30 seconds. This is good news.

[Helen Goodman (Bishop Auckland) (Lab)]

Ring your mum?

[Mr Streeter]

I do that every week. I don’t know what the hon. Lady is on about.

This builds on the important work the Electoral Commission is doing to get the message across that everyone should register to vote. I am also pleased that the commission is strongly supporting national voter registration day—an excellent initiative launched by Bite the Ballot last year—in a number of ways, including by re-launching the “Ballot Box Man” YouTube advert aimed at encouraging young people to register to vote. If you have not seen it, Mr Deputy Speaker, it is very entertaining and makes the point extremely well. A wide range of social media activity is being undertaken, including on Twitter and Facebook. A range of resources is being sent out to electoral administrators and the commission’s partners from across the voluntary, public and private sectors to help them get people registered. The commission is also supporting the launch of Operation Black Vote’s bus tour across Great Britain—that also begins on national voter registration day—to get more BME people on the electoral register.

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to follow my hon. Friend the Member for Sheffield Central (Paul Blomfield). I want to pick up where he left off—on young people.

One of the worst things about the big fall in the number of people on the register is the massive reduction in the number of young people. As my right hon. Friend the Member for Tooting (Sadiq Khan) said, if young people do not get the habit of voting when they first can, they are highly unlikely to take it up later in life. In a written parliamentary question, I asked the Minister, who is not quite in his place,

“how many people have been informed that their application for inclusion on the…register was not valid because their national insurance number was not provided”.

He replied:

“Failure to provide a National Insurance number does not result in an application being declared invalid.”

He does not know what is going on. I have a letter from an ERO in response to a young person’s application to register to vote. It read, “Thank you for your recent application to register. Unfortunately, I am unable to process your application because it was incomplete. The following information is required and was incorrect or missing: national insurance number.”

There are 440,000 young people still at school who turned 18 between 1 September and 1 May. The person that letter was sent to could not register because she did not have her national insurance number. I do not know how many hon. Members spend a lot of time with teenagers, but a letter with a young person’s national insurance number arrives before they are 16, and we are suggesting that two years later teenagers will know where that letter is and have kept it in a safe place. I cannot think of anything more naïve. How many young people will have lost it?

[Mr Streeter]

What about the parents?

[Helen Goodman]

Yes, the hon. Gentleman mentioned the “ring mum” solution before. How outrageous. What about young people in care? What about young people estranged from their families? What a disgraceful attitude to large numbers of young people.

We rang the council to find out what to do. It suggested that the person bring their passport, which costs £72. It suggested a driving licence, which costs £34. These are all things that young people do not have.

[Mr Streeter]

They don’t have passports?

[Helen Goodman]

I tabled a PQ to the man who is commenting from a sedentary position now asking how young people were supposed to know what their national insurance number was. His answer was: payslips and correspondence with HMRC and the Department for Work and Pensions. The truth is that 18-year-olds who are still at school do not have payslips or correspondence with HMRC or DWP. The Government have not thought this through.

The other thing the council asked for was a council tax bill. No 18-year-old gets a council tax bill. This is completely incompetent. Ministers have not thought this through. I went to the website to find out what to do. Nobody can get their national insurance number on the website. That is not how it works. They can, however, ring a very nice man on: 0300 200 3500. They will get a very nice man with a lovely Lancashire accident, and he will put their national insurance number in the post.

The suggestion that we have heard from Ministers that this information is readily available is totally naïve. The DWP Ministers who are responsible for giving people their national insurance numbers and informing them cannot even be bothered to turn up and sit on the Bench for this debate. They have a central role. The truth is that it displays all the attitudes of DWP Ministers to young people: they want to take the housing benefit off 18 to 21-year-olds; now they want to take the vote from those very same young people. It is a total disgrace. [Interruption.]

Oral Answers to Questions

Debate between Helen Goodman and Gary Streeter

Thursday 27th March 2014 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

7. When the Electoral Commission will reply to the letter from the hon. Member for Bishop Auckland of 6 March 2014 regarding donations from Scythian Ltd.

[Mr Gary Streeter (South West Devon)]

The Electoral Commission responded to the hon. Lady on 14 March.

[Helen Goodman]

I am grateful to the hon. Gentleman for that reply. I have now seen the reply from the Electoral Commission. I raised the matter because Scythian is owned by a person who worked for Dmitry Firtash who has just been arrested in Vienna, and that raised questions about the money. The Electoral Commission seems to be relying on the recipient of the money to do the checks. Does he agree that that is an incredibly weak situation for the Electoral Commission to put itself into?

[Mr Streeter]

It is the system set up by this Parliament, and the matter has been thoroughly investigated, under the existing rules, by the Electoral Commission, which found that the participants had complied fully with all the rules.

Oral Answers to Questions

Debate between Helen Goodman and Gary Streeter

Tuesday 27th July 2010 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

2. What discussions the Electoral Commission has had with Government Departments on funding levels necessary for it to undertake its functions under the Government's programme of electoral reform.

[Mr Streeter]

The Electoral Commission informs me that its chair and chief executive have held discussions with the Deputy Prime Minister on the commission’s role in relation to a referendum on changes to the voting system for the United Kingdom Parliament, and on the funds that it will require to perform that role. The commission also informs me that it has not held discussions with the Government about the funding implications of other proposals for electoral reform.

[Helen Goodman]

If there is one thing more important than tackling the deficit, it is the integrity of our democratic system. The hon. Gentleman has set out part of the ambitious programme of reform with which the Electoral Commission is having to deal. Will he also press the Deputy Prime Minister to ring-fence the commission so that its budget will not be cut at this difficult time?

[Mr Streeter]

The Electoral Commission expects to have to spend about £9.3 million in connection with the referendum on the alternative voting system. I am sure that the House will approve that amount, and I do not expect any difficulty to be involved in providing the commission with sufficient resources to enable it to do its job properly.