Oral Answers to Questions

Jo Swinson Excerpts

Thursday 18th July 2013 Commons Chamber

[Mary Macleod (Brentford and Isleworth) (Con)]

7. What recent progress he has made on employment law reform.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

We are making good progress on our review of employment law. On Friday the Government published an update including a call for evidence on whistleblowing and outlining that the new employment tribunal rules of procedure will come into effect on 29 July. We are also making changes through the Children and Families Bill to extend the right to request flexible working to everyone and introduce a radical new system of shared parental leave.

[Mary Macleod]

In the last few weeks two Opposition Front-Bench Members have been to my constituency to talk to businesses, and I am so glad they are taking their lead from the Prime Minister, who was there in 2011 to talk to small businesses about simplifying employment legislation. Will the Minister build on the great work this Government have been doing in simplifying the process of doing business for entrepreneurs by reducing the amount of red tape and admin?

[Jo Swinson]

I commend my hon. Friend on her work championing small business in her constituency and beyond. She is absolutely right that we need to drive through the implementation of the reforms we have already outlined. She will be pleased to note that the CBI-Harvey Nash employment trends survey shows a significant improvement in employer perceptions of the burden of employment law. That is good for British business and good for job creation, too.

[Julie Hilling (Bolton West) (Lab)]

According to the OECD, the UK already has one of the most lightly regulated labour markets among developed countries; only the USA and Canada have lighter regulation. Why on earth are we trying to water down employment rights even further?

[Jo Swinson]

The first thing I would say to the hon. Lady is that our lightly regulated employment market is an asset to the British economy. It helps the economy to grow and it is one of the reasons why, despite the very challenging economic circumstances we have seen and despite the fact that unemployment is still too high, we have seen employment rates bear up rather better than in some other countries. It is important that we simplify employment law—I would have hoped that there would be cross-party agreement on that—but of course it is also important for a functioning economy that we ensure that basic protections remain in place for workers.

[Mark Pawsey (Rugby) (Con)]

rose—

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[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The Government’s payday lending summit provided an excellent opportunity to deliver a strong message to the payday industry to get its house in order. It focused particularly on the Financial Conduct Authority’s priorities for reducing consumer harm when it becomes the regulator in April, ahead of its consultation on its credit rulebook this September.

[Jonathan Reynolds]

I welcome the Minister’s answer and the summit, but let us be honest—the Government have consistently ducked clamping down on predatory pricing and extortionate interest charges, despite the amendment secured last year in the House of Lords that gives the regulators the ability to control costs and loan duration. Notwithstanding the spin of holding a payday lenders summit, when is the Minister going to promise to act so that families across the country can be protected from these predatory activities?

[Jo Swinson]

Significant action is being taken. The Office of Fair Trading has referred the industry to the Competition Commission because of widespread non-compliance. It is taking its own enforcement action, which has already resulted in a third of the lenders that have responded so far—the rest are due to do so this month—leaving the market altogether as a result of the tough action being taken. We have given the FCA stronger powers to enable it to ban products, impose unlimited fines and order money to be paid back to consumers who have been ripped off. That is a pretty comprehensive package of action to clamp down on this unscrupulous and irresponsible lending behaviour.

[Ann McKechin]

If other jurisdictions, such as Florida, already have effective real-time recording systems that stop borrowers accumulating unpayable debts, why cannot we have such a system here, now?

[Jo Swinson]

Such systems rely on the industry to be able to update them. The industry is looking at and working on that. We have credit reference agencies, which work well in many of the credit markets, but the real-time issue that the hon. Lady raises is a genuine one and more difficult to set up than the systems in place. We are encouraging the industry to address that, because it will help to improve affordability assessments.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Is this issue not also about the level of household debt—households running into debt and not knowing how to manage a household budget? Much more information should be available to take people away from payday lenders.

[Jo Swinson]

My hon. Friend makes an extremely important point. We are introducing financial education in schools, which is an important development to make sure that people have the tools to make decisions, but it is also important to note that half of the people who take out a payday loan are already showing signs of financial stress. So although we need to tackle the problems of payday lending, we also need to tackle the problems that get people there in the first place, and make sure that they have good access to the free and confidential debt advice available. I encourage anyone in financial difficulty to seek help sooner rather than later.

[Ian Murray (Edinburgh South) (Lab)]

A recent report by the Office of Fair Trading accused payday lenders of causing “misery and hardship”. The Minister herself said that

“the scale of unscrupulous behaviour . . . and the impact on consumers is deeply concerning”

and that the Government

“wants to see tough action”.

Despite an amendment in the other place last year, to which my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) referred, to give the regulators the ability to curb costs, the Minister is still failing to act. The public will note with interest that a major donor to the Conservative party, Adrian Beecroft, has a significant interest in this industry. Is that what is holding the hon. Lady back from stronger regulation? She is in severe danger of becoming known as the Minister for APR.

[Jo Swinson]

The short answer to the hon. Gentleman’s question is no, because the Government are taking significant action. I think he misunderstands; the OFT report shows the biggest set of problems in the industry. I know that much of the focus ends up on the APR headlines, but the surveys and the consumer organisations working with the issue day in, day out show the problems around issues such as affordability assessments, continuous payment authority abuse and abuse of the way in which roll-overs are used. The FCA has said specifically that it is looking to plug any gaps in regulation in all those areas when it takes on the role of regulator next April. We do not have to wait very long to see its draft rule book, which will be published this September.

[Neil Carmichael (Stroud) (Con)]

13. What recent assessment he has made of the value of supply chains to the UK economy.

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[Hugh Bayley (York Central) (Lab)]

16. What outcomes his Department is seeking through its science and society budget.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

Our science and society programme successfully engages people of all ages and backgrounds with science. It includes 25,000 science, technology, engineering and mathematics ambassadors providing positive role models for students to increase and widen participation in science; the biggest ever Big Bang Fair in March this year; and public dialogue supported through Sciencewise to inform public policy.

[Hugh Bayley]

The Science Museum Group, which includes the National Railway museum in York, has had its budget cut by a quarter over the last two spending reviews. It does immensely important work in encouraging young people to take an interest in science, leading to careers in science. Will the Minister meet people from the museum to consider how the science and society budget could be used to fund some of their outreach work, especially with young people?

[Jo Swinson]

As the hon. Gentleman knows, the science budget has been protected because we absolutely recognise the importance of science and research to the future economy and in encouraging people to take on science. The lead sponsor Department for the Science museum and museums generally is the Department for Culture, Media and Sport, and colleagues in DCMS will have been engaging significantly with the Science museum and others. I am sure that the relevant Minister will be very happy to meet—

[Hugh Bayley]

Will you meet them? It is your budget.

[Jo Swinson]

I will happily do so. I am answering on behalf of a colleague, but I will happily have that meeting.

[Hugh Bayley]

Thank you.

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[Greg Mulholland (Leeds North West) (LD)]

It has now been confirmed that the chief executive of the British Beer and Pub Association, the lobbyist for the large pub companies, made two false statements to the Business, Innovation and Skills Committee and said on television that the Government had figures for pub closures, which they do not. The opponents of much needed reform are conducting a campaign of misinformation. What assurances can I get from the Minister that the claims being made, which are simply not backed up by evidence, will not be taken into consideration when the decision is made?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

My hon. Friend, who has been a strong campaigner on this issue, will know that the Government have conducted a consultation on the proposed statutory adjudicator and code for pubs, which has had more than 1,100 written responses, while we have had more than 7,000 responses to the online survey. Clearly, ploughing through and analysing all that information is taking a little time. He raises concerns about the issues with the Select Committee, but obviously Select Committees can ask further questions of witnesses, if they have concerns. I am happy to meet him, however, to discuss his concerns further.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

Does the Secretary of State have any plans to look at the Insolvency Act 1986? Hedge funds appear to have the ability to acquire companies, to empty them of their assets, to appoint administrators of their choosing and to proceed without fear of being pursued vigorously. That certainly seems to be what is happening at Coventry City football club. Will he look at the situation and the framework of the law?

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[Mark Pawsey (Rugby) (Con)]

On employment law reform, does the Secretary of State agree that there would be a significant boost to our country’s small businesses if the cost of attending employment tribunals was reduced, given that, according to his Department, the average cost of successfully responding to and defending a claim is £6,200?

[Jo Swinson]

The hon. Gentleman is right to raise that issue. It is fair to say that employment tribunals are costly in terms of time, money and stress for everybody involved, both employers and employees, so what we are trying to do through our employment law reforms is reduce the number of cases going to tribunal. We are streamlining the rules of procedure, which should also help to reduce costs, but the really important savings will come from getting more cases resolved through early conciliation, which is what the Government are pressing ahead with.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

This morning the Globe group of parliamentarians held a seminar highlighting the risk of financial instability as a result of the overvaluation of fossil fuel reserves internationally and nationally without taking account of international climate change commitments. Will the Government contact regulators to ensure that they take into account the risks of instability and ensure that we do not see the bursting of a carbon bubble in the way we saw dotcom bubbles burst and other collapses in the markets?