Affordable Credit for People on Low Incomes

Debate between James Cartlidge and John Glen

Wednesday 5th December 2018 Westminster Hall

[John Glen]

Absolutely. I really want to make progress on the issue during my time as Economic Secretary, and in my response I will draw attention to some of the measures that have been taken.

I also had the pleasure of working with the right hon. Gentleman on the Select Committee. The assiduous way that he has pursued the challenges that people on low incomes face is legendary across the House. The whole House admires his efforts.

I want to get to the heart of the matter. The right hon. Gentleman has raised a number of issues about the conduct of Provident, as have five other hon. Members. We also had a conversation earlier this week. I recognise that he sees a citizens bank as playing two roles—first, ensuring that the poorest members of society can access core banking services, and secondly, providing credit to those people to help them to smooth their income, spread costs over time and cope with unexpected financial shocks. I will address each of those in turn.

I will set out how the progress that the Government have made on ensuring access to core financial services such as bank accounts has been achieved. The nine largest personal current account providers in the UK are legally required to offer a basic bank account to customers who are unbanked. Those accounts must be fee-free and must not have an overdraft facility.

The right hon. Gentleman drew attention to the key issue of the need to access affordable credit. The Government’s vision is for a well-functioning and sustainable consumer credit market that can responsibly meet the needs of all consumers. I think there is some agreement on that vision on both sides of the House.

I recognise that we face a playing field that is not level. My hon. Friend the Member for South Suffolk (James Cartlidge) and other hon. Members raised the point about advertising budgets, which is why one of the Budget announcements seeks to tackle the barriers faced by key partners such as housing associations to referring people to sources of affordable credit. The default setting is to find a better option than some of those that can be found on Google.

[James Cartlidge]

Has the Minister considered speaking to Google and other companies about that? It is a good point that it is very difficult to police the robot algorithm that sets up their adverts. I do not see how he can do that unless he speaks to the companies themselves.

[John Glen]

I am happy to take on that suggestion. I will look into what we can do as part of the challenge we also set in the Budget to introduce technical solutions to try to level that playing field and to make community development financial institutions such as Scotcash, which I visited in Glasgow in September, more accessible earlier in that process.

On Financial Conduct Authority regulation, I will try to address the points raised by the hon. Member for Walthamstow (Stella Creasy), who has raised the matter in the House previously. There was a review in May, although she does not agree with all its conclusions. Since the review, I have had more conversations about Amigo Loans and other issues, such as what can be done to monitor and to provide the evidence. In the interests of responding to the right hon. Member for Birkenhead, I will not carry on, but I do not want to be flippant about the serious concerns of the hon. Member for Walthamstow.

The FCA governs the rules about the provision of credit and is responsible for the regulation of consumer credit. It is a robust regulator, which I always encourage to be even more robust. It has the tools to take swift, effective action against improper practices. My regular dialogue with the chief executive, Andrew Bailey, and the director of strategy and competition, Christopher Woolard, covers that topic, and I know that high-cost credit is a priority for them.

The right hon. Gentleman specifically highlighted a number of worrying examples of high-cost credit lenders in Birkenhead. I listened with concern and serious dismay to the impact of those practices on vulnerable consumers. I hope the action that the FCA is undertaking in relation to lenders, as part of its broader review of the high-cost credit market, will have some impact.

The right hon. Gentleman mentioned Provident. The FCA is consulting on new rules and guidance specifically for home-collected credit firms. I will draw its chief executive’s attention to this debate. The rules will include requirements for firms to clearly explain the costs of a new loan compared with the cost of refinancing an existing one, and guidance stating that firms cannot visit customers to offer new loans without an explicit request from the customer.

The provision of affordable credit is a multifaceted problem and there is no single solution to overcome it. It is not sufficient to simply tighten regulation for high-cost lenders. Therefore the Government are desperately keen, and have taken steps, to ensure that low-income consumers can access safe, affordable and sustainable credit. In our civil society strategy, we announced that £55 million of funding from dormant assets would be directed towards addressing the problem of access to affordable credit and alternatives.

In the autumn Budget at the end of October, the Chancellor announced a package of measures to support affordable lending, including a prize-linked savings scheme to encourage the growth of the credit union sector. Although the sector is variable in quality, as has been discussed, there are opportunities to expand it. Another measure is an affordable credit challenge fund to encourage the UK’s vibrant FinTech sector to solve the challenges that I just discussed with my hon. Friend the Member for South Suffolk. A further measure is a change in the regulatory boundary to allow registered social landlords to offer their tenants better community lenders. A final measure is a feasibility study into a no-interest loan scheme, and a pilot of that scheme.

The right hon. Member for Birkenhead is absolutely right that banks have a responsibility to assist and facilitate better solutions in this area. Earlier this year, we took through the House the single financial guidance body, which will be a huge partner in working—I hope—with the banks, which often have worthwhile initiatives that are piecemeal and not joined-up. My vision, which is very similar to his, is of the banks coming together to recognise that, across the country, there are pockets of poverty and deprivation that need a new solution, which involves pooling their expertise and endeavour and working closely with the single financial guidance body to deliver a better set of options and outcomes for the constituents for whom he has been fighting so earnestly for 40 years.

I thank the right hon. Gentleman for securing the debate. He and other hon. Members have raised some significant issues that I take to my heart and back to my office. I hope I have offered him some reassurance by setting out the comprehensive and concerted actions that the Government have taken with the FCA to address the challenges in this area. I am clear that the Government are on a journey to actively and comprehensively support vulnerable borrowers. I want to continue to work with him, and other hon. Members from both sides of the House, using the knowledge and expertise that exists, to come up with even better solutions to deal with a real problem in some communities in this country.

Question put and agreed to.

Mobile Infrastructure Project

Debate between James Cartlidge and John Glen

Wednesday 10th February 2016 Westminster Hall

[John Glen (Salisbury) (Con)]

I beg to move,

That this House has considered the mobile infrastructure project.

It is a pleasure and an honour to serve under your chairmanship, Mrs Main.

The purpose of the debate is to express the concerns of four distinct communities in my constituency, in Ebbesbourne Wake, the Woodford valley, Broad Chalke and Bowerchalke, with what is in essence the failure of the mobile infrastructure project. We hoped that the project would improve the poor or in many cases non-existent mobile phone coverage in those areas, but none of the proposed masts at those sites have been seen through to completion. I will set out the challenges of the project and the lessons to be learned from it. I will also make constructive suggestions about how we can move forward. It is heartening to see a number of colleagues in the Chamber with experience, I suspect, of similar disappointments with the project.

The mobile infrastructure project, on which I am sure the Minister will give us authoritative detail later, was first announced in 2011. The Government envisaged working in partnership with a private firm, Arqiva, and providing it with capital funding to build new mobile phone masts. The masts were to be operated by four large operators, which would fund the operating costs for 20 years. The aim was to improve the coverage and quality of mobile network services for the 5% to 10% of consumers and businesses living and working in areas with poor or non-existent coverage, and to ensure that 99% of the population had mobile service.

In a series of debates on broadband infrastructure and mobile telephony everyone has been impressed with the progress made by the Government generally in increasing the percentage of people who can access new services. For those who cannot, the situation is extraordinarily frustrating. My understanding is that 600 potential sites were identified at the beginning of the project, and the contract with Arqiva commenced in May 2013. By December 2015, a couple of months ago, the project had cost £9.1 million and only 15 masts were live. The Secretary of State announced that the project will not be extended past its deadline of March 2016, so it is anticipated that by the time the project ends only about 50 masts will have been built, which is perhaps a sixth of the number of masts envisaged five years ago.

The project faced significant challenges from the beginning. First, the Select Committee on Culture, Media and Sport was told that Arqiva had to wait almost a year to receive accurate data on “not spot” zones aligned with operators’ network maps. Arqiva said that it had not anticipated that delay when the project was scoped.

Secondly, perhaps the most typically vexing experience has been of the delays in planning permission and the difficulty of obtaining it for a number of sites. The Minister contacted me about sites in my constituency, acknowledging uncertainty over where they might be, and I engaged with the parishes concerned in an effort to find agreeable sites quickly. In such rural areas with the poorest mobile coverage, however, two factors are significant. The proposed sites are often in areas of outstanding natural beauty or national parks—we have both in my constituency—which can provoke numerous representations, because if a mast is not in the right place, it is there for a long time, causing significant environmental challenges. We must, however, recognise the need to overcome that obstacle, because better mobile coverage is absolutely necessary. Getting right the planning permission, with an economically viable power connection, has been a significant barrier.

[James Cartlidge (South Suffolk) (Con)]

We had three proposed masts in my constituency, one of which will be going ahead and will be transformational, proving the possible impact. Does my hon. Friend agree that the lesson we might have to learn if the scheme returns—I hope there will be some kind of renewed funding—has to be on the basis of communities coming forward to an extent and being proactive and willing to accept masts, so that we know there is a good chance of getting planning permission? Instead, the other way around, we have been saying, “Here’s a load of money,” and people get excited, but nothing actually gets delivered.

[John Glen]

I am extremely grateful for my hon. Friend’s intervention. That is where we need to get to by the end of the debate: a real sense of what can be achieved, with a call-out to those communities that are most keen to secure a mast location under the MIP or a successor project, if there is one, so that we can make things happen. Raised expectations that are dashed after two or three years is a most frustrating phenomenon for constituency MPs to deal with.