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Debate between Helen Goodman and Nia Griffith

Thursday 9th May 2013 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

I want to speak on a number of important issues. The Queen’s Speech seems to lack vision. There is no idea of a coherent society or how we make it a better and fairer society. There seems to be a lot of tinkering at the edges without really tackling the main causes of the main issues of the day. As my hon. Friend the Member for Warrington North (Helen Jones) pointed out, we lack an economic vision—a vision to rebuild our society and use the talents of our people to improve the lot of all of us.

We often talk about community cohesion, but when we try to define what makes that it leads to all sorts of discussion. Key to community cohesion is a sense of respect for each other and self-respect, and key to that is thriving communities that offer job opportunities for our young people and for all our citizens. That would bring the welfare bill down. Many people are desperately looking for a job and would like to work more hours, but nothing in the Government’s proposed programme will help to create jobs.

The Welsh Government are playing their part in creating jobs and providing support to businesses. They have already created 4,000 jobs in the Jobs Growth Wales programme, and are on target to create another 4,000 this year and the year after. The focus is on helping the private sector to grow, so young people are helped into work and businesses are helped to grow. Jane Hutt, the Finance Minister in the Welsh Government, has recently announced a package of £75 million of additional capital investment to support the Welsh infrastructure investment plan. In addition, £400 million is to be spent on housing to help to realise a target of 7,500 affordable homes by 2016.

But we all know that the main economic levers are held by the UK Government, where the savage cuts in tax credits and the increase in the regressive tax VAT mean that millions of less well-off families are struggling to make ends meet, particularly as prices are rising very quickly, while those earning more than £150,000 are given a tax break. This is not only unfair, it is economic nonsense, because the least well-off spend their money quickly and it goes back into the local economy, whereas the better-off may wish to stash it away or spend it abroad. We have only to look at our town centres to see the dire effects of squeezing middle and low-income families. Research also shows that greater equality between the better-off and the less well-off members of society makes for greater community cohesion. We need a tax on bankers’ bonuses to provide money to invest in jobs, such as house building.

On immigration, what we really want is a crackdown on all forms of exploitation, whether of migrant workers or our own workers. There are still far too many examples of gangmasters bringing in groups of people, housing them in substandard conditions, making all sorts of deductions from their salaries and, with regard to their hours and working conditions, exploiting them ruthlessly. Far from tackling the problem, the Government seem to be doing the opposite. They have done away with the Agricultural Wages Board, which was one body that set down minimum standards for accommodation, and have put the Gangmasters (Licensing) Act 2004 under threat, whereas we would like to see it extended to cover those in the construction and care industries, for example.

Many Members will have visited the excellent exhibition on human trafficking opened by the Prime Minister. One of the calls was for some form of slavery Act. Perhaps that is a slightly dramatic term, but it would have been nice to see something in the Queen’s Speech that tackled that type of exploitation and began digging down into the real problems that exist not only in one or two parts of Great Britain, but right across the country, as the exhibition’s wall map showed. Simply not enough is being done to tackle human trafficking.

Another issue, mentioned by my hon. Friend the Member for Slough (Fiona Mactaggart), is the overseas domestic workers visa. That is another thing the Government have done that has made it more difficult to trace people and rescue them from domestic slavery. That is what we really need to tackle when we talk about immigration. Trafficking and exploitation have continued, all of which is bad for not only those workers, but local people, who are obviously being undercut. I think that everybody would accept that what we really want is decent jobs with decent remuneration for local workers and migrant workers alike.

[Helen Goodman]

My hon. Friend is making an interesting case. I represent a constituency in the north-east, where we have high unemployment and low wages. Will she tell us what the situation is like with regard to unemployment and wages in her constituency?

[Nia Griffith]

We have two great scourges: first, unemployment, and secondly, underemployment and a low-wage economy. That means that people are dependent on tax credits. We would like the minimum wage to be increased at least in line with inflation and to move towards a living wage that gives people enough to live on without having to have their salaries topped up by tax credits. That is obviously an aspiration that many of us share. Certainly, some of our local councils are trying to work towards that.

Independent Debt Advice

Debate between Helen Goodman and Nia Griffith

Tuesday 8th February 2011 Westminster Hall

[Nia Griffith]

My hon. Friend vividly highlights a serious problem; that is exactly what will happen.

There will be cuts to advice on education, employment, family, housing, immigration and welfare benefits. Those cuts will have a direct impact on funding for CABs and their ability to provide a comprehensive service, but they will also have a direct impact on clients’ debt problems. If clients are unable to fight for the welfare benefits or extra provision for a special needs child to which they are entitled, they may be faced with a worsening debt problem.

Given the cuts to legal aid and to CABs through the withdrawal of the financial inclusion fund and local government funding, CABs will struggle, and many will close. The Government’s Office for Civil Society has a transition fund that will apparently provide grant funding to bridge any gap, at least in the short term, but it applies only to England, and it applies only to organisations with an income of between £50,000 and £10 million, which excludes some CABs. Can the Minister clarify whether any of the transition fund will be used for debt advice and, if so, how much?

What are the alternatives to organisations such as the CAB? How else can debt advice be delivered? Are the Government expecting the Consumer Credit Counselling Service and Payplan to deal with all the additional workload of clients who will no longer be able to go to a CAB? Those organisations receive funding from the credit industry, and although Payplan has considerably expanded its services in recent years, it is simply unrealistic to expect it to be able to expand quickly enough to deal with an additional 2 million cases a year. Moreover, it deals with debt; it does not deal with the full range of clients’ problems, which are often inextricably linked to their debt problems.

We have to ask the Government what alternative they propose. Is it debt management companies? The record and practice of many such companies gives rise to serious concern. In September 2010, the Office of Fair Trading told 129 debt management firms that they faced losing their consumer credit licences unless immediate action was taken to comply with its debt management guidance. The OFT found misleading advertising; in particular, firms fail to disclose that a fee is retained by the business. In fact, firms misrepresent debt management services as being free when they are not. That is serious, as clients already have enough difficulties without being exploited still further.

[Helen Goodman]

Does my hon. Friend share my concern that meetings were sponsored at the Tory party conference by the very organisations that are perpetrating scams on our constituents?

[Nia Griffith]

I certainly share that very real concern, because not only is the advice not free, it is poor. The OFT found that front-line advisers working for debt management companies lack competence, and provide poor advice based on inadequate information. Not only is the client landed with having to pay a fee that is not made clear in the firm’s advertising, they are then poorly advised. Receiving poor advice on debt management is a serious business; it can cost the client considerable amounts of money.

Furthermore, the OFT also reports that there is low industry awareness of the Financial Ombudsman Service rules for resolving consumer complaints. Even with all the work that CABs and similar providers are doing at present, we currently have a situation where 129 companies that are not fit for purpose are trading on people’s debt problems.

What will happen to a CAB’s clients when the funding for debt advice is withdrawn? Some may not seek debt advice at all, perhaps because they do not know where else to go, or perhaps because they realise that debt advice companies will charge them fees and they worry, rightly, about being exploited and getting into yet more difficulty. Many will be driven to seek advice from debt management companies.